Freeman-Vagg v Oldstream Pty Ltd

Background

1. On 15 March 2019, the parties entered into a 12-month retail lease for the premises. Those premises consisted of a ground floor area in a block of serviced apartments, with that ground floor area being designed for use as a café or restaurant or similar. A number of restaurants had operated from that ground floor area before the appellant's lease, and, after the appellant vacated, the area was used at various times as a bakery, donut shop and bar.
2. In December 2019, the appellant ceased paying rent due under the lease.
3. On 15 February 2020, the appellant commenced proceedings against the respondent (the "first proceedings" - COM 20/07370) asserting she was not required to pay the rent arrears owing under the lease and that the respondent had breached the lease and should pay her compensation for those breaches. The appellant was not legally represented at that hearing.
4. On 27 February 2020, the appellant vacated the premises.
5. On 17 July 2020, the respondent commenced proceedings against the appellant (the "second proceedings" - COM 20/31056) for rent arrears owing under the lease.
6. On 26 August 2020, the first proceedings were heard. At the conclusion of the hearing the appellant withdrew her claim. The respondent sought costs and that costs application was adjourned to be determined on a subsequent date.
7. On 21 October 2020, the appellant commenced further proceedings against the respondent (the "third proceedings" - COM 20/44840) again asserting she was not required to pay the rent arrears owing under the lease and that the respondent had breached the lease and should pay her compensation for those breaches.
8. On 28 April 2021, the second and third proceedings were heard by the Tribunal, with written submissions being subsequently received from the parties. Both parties were legally represented at that hearing. The Senior Member of the Tribunal who heard those proceedings was the same Senior Member who had heard the first proceedings. No objection was taken at this hearing to the Tribunal being so constituted.
9. On 6 September 2021, the Tribunal published its decision in respect of the second and third proceedings (the "principal decision"). In short, the respondent was successful in both proceedings, with the Tribunal determining the respondent was entitled to the arrears of rent and all claims for compensation by the appellant being dismissed. The appellant was ordered to pay the respondent $3,646.36 together with an order that the respondent was entitled to the whole of the security bond. The principal decision is the subject of the first appeal, numbered 2021/00283619 (the "principal appeal").
10. The respondent made applications for costs in the second and third proceedings. In addition, and in the third proceedings, the respondent sought a costs order against the appellant's solicitor.
11. On 5 October 2021, the appellant lodged the principal appeal.
12. On 18 November 2021, the Tribunal published a single set of reasons in which its decisions in relation to the various costs applications made in the first, second and third proceedings were set out together with the Tribunal's reasons for those decisions (the "costs decision"). The costs decision is the subject of the second appeal, numbered 2021/00353172 (the "costs appeal"). This costs appeal is, in essence, three appeals, being an appeal from the costs decision made in each of the first, second and third proceedings.
13. In these reasons we shall deal with the principal appeal and the costs appeal separately and in that order. We shall then deal with the costs of these appeals.

The Grounds of Appeal in the Principal Appeal

1. In relation to drafting grounds of appeal former High Court judge, the Hon Michael McHugh AO QC, in Preparing and arguing an appeal, NSW Bar Association Bar News, Winter 2010, at 85-92, wrote: "The cardinal rule for drafting a notice of appeal is to be selective. If the appeal notice contains too many grounds, the best points are likely to be hidden in a thicket of weak points. The notice of appeal should identify only those errors of ultimate fact or law which affected the result, and the fewer the better. As Justice Branson has explained (Sydneywide Distributors Pty Ltd & Anor v Red Bull Australia Pty Ltd & Anor (2002) 55 IPR 354 at 355-356): 'Not every grievance entertained by a party, or its legal advisors, in respect of the factual findings or legal reasoning of the primary judge will constitute a ground of appeal. Findings as to subordinate or basic facts will rarely, if ever, found a ground of appeal. Even were the Full Court to be persuaded that different factual findings of this kind should have been made, this would not of itself lead to the judgment, or part of the judgment, being set-aside or varied. This result would be achieved, if at all, only if the Full Court were persuaded that an ultimate fact in issue has been wrongly determined. The same applies with respect to steps in the primary judge's process of legal reasoning. Although alleged errors with respect to findings as to subordinate or basic facts, and as to steps in the process of legal reasoning leading to an ultimate conclusion of law, may be relied upon to support a ground of appeal, they do not themselves constitute a ground of appeal.'"
2. The grounds of appeal do not follow that advice.
3. The grounds of appeal extend to 28 pages, contain (on their face) 17 separate grounds of appeal, with each ground containing numerous sub-paragraphs (one ground contains 33 such sub-paragraphs). They are discursive, disjointed and describe a host of grievances and a multitude of subordinate and basic facts. They do not, or at least not in any clear fashion, isolate the errors of ultimate fact or law said to be erroneous and which allegedly affected the result of the case. Many grounds and paragraphs do not state any recognised appellable error, whether raising a question of law or otherwise.
4. Doing the best we can in understanding the grounds of appeal, aided to a degree by the more focused oral submissions, the appellant's grounds of appeal were these (keeping as much as possible to the appellant's terminology): 1. The Tribunal erred in law for breach of procedural fairness and bias (at [12], [17], [18]-[22] and [97] of the principal decision) by finding the Court Book lacked efficacy and professionalism. 2. The Tribunal erred in law for failing to consider relevant considerations and in (wrongly) considering irrelevant considerations in its summary of "Facts" at [31]-[62] of the principal decision. 3. The Tribunal denied the appellant procedural fairness in failing to consider relevant factors and excluding expert evidence. 4. The decision was unreasonable within the meaning of Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 2013 in finding the Court Book was unprofessional. 5. The decision was unreasonable (per Li and at [102]-[104] and [115] of the principal decision) in finding the appellant did not provide any evidence of unconscionable and deceptive conduct by the respondent. 6. The Tribunal erred in law (at [75]-[87], [108] and [110] of the principal decision) in finding there was no jurisdiction to consider the alleged breaches of the Australian Consumer Law (the "ACL"). 7. The Tribunal erred in law (at [114] of the principal decision) by wrongly deciding the application of the adverse inference in Jones v Dunkel. 8. The Tribunal erred in law by finding (at [38], [53]-[60], [116], [122] and [125] of the principal decision) that the appellant was not a witness of credit. 9. The principal decision was unreasonable (per Li) by not finding that the preponderance of evidence showed that the respondent was guilty of unconscionable and deceptive conduct under the Retail Leases Act 1994 (NSW) (the "RLA"). 10. The Tribunal erred in law by failing to consider a relevant factor in respect of its RLA and ACL claims, namely the mis-description of the dimensions of the premises. 11. The Tribunal erred in law (at [119] and [128]-[131] of the principal decision) by failing to consider relevant factors and unreasonableness (sic) as to the cause of the appellant's proposed sub-tenants not proceeding with the proposed sub-leases. 12. The Tribunal erred in law for breach of procedural fairness for bias against the appellant and her solicitor. 13. The Tribunal erred in law (at [63] of the principal decision) by failing to consider s 62B of the RLA in its summary of legislative framework. 14. The Tribunal erred in law for breach of procedural fairness (at [72]-[73] of the principal decision) by stating that it would not consider any evidence that the parties did not take the Tribunal to in submissions. 15. The Tribunal erred in law (at [137]-[139] of the principal decision) by not finding unconscionable conduct (under the RLA) and not finding a major failure (under the ACL). 16. The Tribunal erred in law in failing to consider certain alleged relevant factors (namely bushfire smoke and the Covid-19 pandemic). 17. (This ground related to the costs appeal and will be dealt with later in these reasons).

Fresh Evidence

1. The appellant, without objection, read an affidavit of the appellant's solicitor affirmed on 5 October 2021 and tendered the documents attached to that affidavit (although they were not attached as either annexures or exhibits).
2. To the extent the affidavit contained some evidence of subordinate facts arguably relevant to the underlying disputes and which was not tendered to the Tribunal, we reject that evidence because the appellant did not establish that that evidence was not reasonably available to the appellant at the time of the hearing before the Tribunal as required by cl 12(1)(c) of Sch 4 of the Civil and Administrative Tribunal Act 2013 (NSW) (the "NCAT Act).
3. To the extent the affidavit contained orders made by the Tribunal at directions hearings, correspondence between the parties and the like, all said to be relevant to ground 1, that evidence is rejected because ground 1 must fail for the reasons given later below.
4. To the extent the affidavit attached audio recordings of various attendances before the Tribunal, those sound recordings were admitted although we did not find them to contain any relevant information.
5. To the extent the affidavit attached the expert evidence tendered by the appellant (attached to submissions delivered on a day subsequent to the hearing day), we admitted that evidence in order to understand the appellant's ground of appeal concerning that expert evidence.

The Tribunal's Decision

1. The evidence before the Tribunal consisted of what was called a "Court Book" of about 1,000 pages, plus the oral evidence of three witnesses (the appellant and her expert Mr Boer, and the evidence of Mr May for the respondent). The hearing took about one day. The Tribunal was subsequently provided with a sound recording of that day's hearing (but not a transcript) together with further written submissions.
2. The Tribunal summarised the issues in dispute between the parties at [14]-[23] of the principal decision. The appellant does not take issue with the accuracy of that summary.
3. The Tribunal said that the respondent's rent arrears claim was straightforward and found that the arrears owing, after deduction of the bond, were in the sum of $3,646.36. There is no appeal from the finding that rent arrears were prima facie owing, nor with the calculation of the amount. The appellant's case rested on her counter claims advanced in the first and third proceedings.
4. At [23] of the principal decision the Tribunal set out the following summary of the appellant's case at the hearing: "The lessee claimed (what is set out below is as her solicitor described her claim): (1) Compensation under s.10(1) or s.62E of the Retail Leases Act 1994 for misrepresentations within the meaning of s.62D of the Act and unconscionable (sic) in 628 and ss.18, 29, 30(1)(e), 60, 61 and 267(4) of the Australian Consumer Law that: (a) The retail lease premises would be cleaned at the expense of the lessor; (b) The lessee's financial obligations under the lease would be limited to the payment of rent and utilities; (c) The kitchen equipment in the premises was in good working order and fit to be used for the purposes of a food catering business; (d) The premises are approved as a licensed restaurant and that accordingly food may be served and delivered. (2) Compensation for engaging in unconscionable conduct in contravention of s.628 of the Act by: (a) Providing keys to be premises two weeks late and failing to waive the charging of rent for that period; (b) Providing the lessee inadequate time to review the lease; (c) Refusing to clean kitchen equipment at the lessor's expense; (d) Refusing to reduce or suspend the charging of rent; (e) Refusing to delay the commencement date for the charging of rent to a date when the lessee was ready to commence trading. (3) The lease was void for being unlawful - unconscionable under s.62B, deceptive under s.62O, false characteristic of the land under s.30(1)(e) ACL - as unfit for retail use whilesoever (sic) the fire safety exit paths from the lease property breached the approved floor plan: (a) Specifically the blocked exit to the hotel lobby and blocked external exit in the event of a fire in the food production kitchen area, (i) As outlined in the report of expert planner John Boers dated 7 October 2020: a. That in general the advertised use of floor space is not for use as restaurant. b. "The key detail being fire safety detail referred to in paras 33, 34, 40 (p10), 102. And particularly cl.183 of the SFV affidavit of 7 October 2020". c. "The floor space being unfit for advertised use may have exposed SFV to a bad situation if there had been a fire." d. "If not potential injury or loss of life, denied insurance claim." e. "Also, any unauthorised land use (clothes shop) would expose her to potential fine (max $6000 for business) plus order to cease from City of Sydney Council." (b) The history of planning instruments and approvals history indicates the building may not have building certification or occupancy certificate for the permitted use in the Lease as a restaurant and commercial kitchen. (4) Restitutionary damages under s.72AA of the Act generally and specifically s. 72AA(1)(a) and as outlined at [185] of SFV affidavit of 7/10/20 (and generally): (a) Loss of co-occupant/ co-tenant Hungry Mind and the Dumpling Guy for contribution of rent for one year at $600 per week for the duration of the lease, estimated as: (i) Loss of $600/ week rent income from Hungry Mind Pty Ltd for 12 months estimated at total of $30,000; (b) $50,000 refund to an investor refunded back on or about 17 April 2019. (c) Average lost income and wastage of costs as indicated in the lessee's bank statements as 3 v $5,300 for a total of $15,900 plus $8,000 deficit for unexpected outgoings for a total of $23,900. (d) $441 for research from the Office of Liquor and Gaming. (e) Legal costs of this (cross) application and the defence of the lessor's application be paid to the lessee. (f) No costs application be made against the lessee in her withdrawn application. (5) An order that rent from about 1 December 2019 to 27 February 2020 (or end date of lease) of about $10,551.44 not be paid to the lessor. (6) An order that the security bond of $7,333.33 be immediately released to the lessee."

Grounds 1, 4, 10, 13 and 14

1. These grounds are dismissed because, even had the assertions contained therein been established, they did not and could not have affected the result of the proceedings (see [16] above). See also Abed v Cosgrove trading as Alison Arts; Cosgrove v Abed [2018] NSWCATAP 4 and Sydney Water Corporation v Caruso and Ors [2009] NSWCA 391 at [8]-[27] and [108]-[112]. For example, even had the Tribunal been wrong in finding the Court Book lacked efficacy and professionalism the result of the proceedings would not have been altered. Cases are decided by evidence (as this case was) and not by the presence or absence of efficacy and professionalism in preparing Court Books.
2. In addition, we make the following particular observations.
3. Ground 1 asserted a denial of procedural fairness because the Tribunal considered that Court Book lacked efficacy and professionalism. First, this ground does not state one of the recognised errors which raise a question of law. Second, a criticism of the state of a court book does not constitute procedural unfairness. Procedural fairness relates to the fairness of the procedure by which a decision is made (such as providing an opportunity for a party to lead evidence and have their submissions heard).
4. The question of bias raised in Ground 1 will be dealt together with Ground 12 later in these reasons.
5. Ground 4 asserted that the Tribunal's decision was unreasonable (per Li) in finding the Court Book was unprofessional. Li concerned unreasonableness in a process of reasoning that led to a decision. Li is not concerned with an observation as to the state of a court book.
6. Ground 10 asserted that the Tribunal erred in law by failing to consider a relevant factor in respect of her RLA and ACL claims, namely the mis-description of the dimensions of the premises. The appellant says the premises were advertised as being of about 97 sqm whereas there was evidence (from Mr May) that the premises were only of about 86 sqm.
7. However, it does not appear this difference (assuming there was such a difference) in area formed part of the appellant's case. We can see no reference to it in the appellant's Statement of Agreed Facts (either as an agreed fact or a fact in issue) provided to the Tribunal nor in the appellant's voluminous written submissions. The advertisement to which the appellant directed us in the Appeal Book ("AB") at AB 595-9 (the AB page references in the submissions and grounds of appeal were for a document other than an advertisement) said the floor area was 1 sqm, and the lease itself (at AB 577) said the floor area was 42 sqm.

Ground 2

1. The appellant asserted that the Tribunal erred in law for failing to consider relevant considerations and in (wrongly) considering irrelevant considerations in its summary of "Facts" at [31]-[62] of the principal decision.
2. In oral submissions, it became apparent that the appellant was complaining that certain evidence was not referred to in the Tribunal's reasons.
3. We do not accept this ground.
4. The Tribunal is not required to refer to all of the evidence in its reasons for decision - Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 per McColl JA, with whom Ipp JA and Bryson AJA agreed, at [61]-[62].
5. A Tribunal should refer to evidence which is important or critical to the proper determination of the matter before it, and to conflicting evidence of a significant nature for example. However, the appellant did not develop any submission to that effect in relation to Ground 2 in the context of the reasons why the Tribunal dismissed the appellant's claims.
6. The appellant did refer to many subordinate or basic facts and evidence in her submissions which, she submitted, were not recorded in the Tribunal's reasons. Accepting that is so for the purpose of argument, that is not enough to make out this ground of appeal because, as Pollard says, there is no obligation to record every fact and every item of evidence. More is required.
7. To succeed on an appeal on this ground an appellant is required to provide submissions which demonstrate why any one or more facts or items of evidence not recorded in the Tribunal's principal decision was critical to the case, and therefore establish that the failure to refer to it meant that the Tribunal erred in either failing to engage with the appellant's case or failed to give adequate reasons. But that was not the appellant's ground of appeal in this case, and nor did the appellant attempt to demonstrate the matters to which we have just referred.

Ground 3

1. In Ground 3 the appellant asserted that the Tribunal denied the appellant procedural fairness in failing to consider relevant factors and excluding expert evidence.
2. This ground has three parts.
3. First, it was submitted that certain evidence was not referred to in the Tribunal's reasons. We repeat what we have said above at [55]-[59] above, namely that the Tribunal is not required to record all of the evidence, but it should refer to critical and significant evidence (and it has not been demonstrated that any of the omitted evidence was critical or significant).
4. The evidence the appellant says was significant or critical, but which was not referred to in the principal decision, was evidence from a Mr Zadravec and a Mr Saz. It is correct that that evidence is not expressly referred to in the principal decision, but in our view that evidence was neither significant nor critical.
5. In Mr Zadravec's short written evidence he recorded his instructions that the appellant had intended to sub-lease part of the premises to a caterer (about which we shall say more later in these reasons). He said that no inspection had been carried out by the local council, but had one been carried out there would have been "breaches" noted requiring immediate attention prior to opening for business. This, he said, prejudiced the appellant's "opportunity" to "cancel" the lease (how that was legally possible was not explained) or negotiate for work to be done at the respondent's cost.
6. Mr Zadravec proceeded to list the work he said needed doing, namely a larger handwash basin and a number of perceived deficiencies in the mechanical ventilation. He said that the absence of remedial work to those items would have prevented a business (presumably being a reference to a caterer) opening.
7. In Mr Saz's short written evidence, he said that he inspected the premises and particularly the mechanical ventilation. He said that the exhaust system was not fully functional and did not provide adequate exhaust air flow required for cooking.
8. In our view the written evidence of Messrs Zadravec and Saz was neither significant nor critical because, assuming (without deciding) that those opinions (together with other evidence) established that there had been some wrongful conduct by the respondent of the types alleged, the Tribunal dismissed the appellant's causation case and the ground of appeal on that aspect of the case (Ground 11) has failed (for reasons set out later below).

Ground 5

1. The appellant asserted that the Tribunal's decision was unreasonable (per Li and at [102]-[104] and [115] of the principal decision) in finding the appellant did not provide any evidence of unconscionable and deceptive conduct by the respondent.
2. It is first necessary to state what is meant by "unreasonable" in this context.
3. Li stands for the proposition that a decision may be erroneous because it is affected by what is sometimes called legal unreasonableness. This unreasonableness, put simply, refers to a conclusion reached in a decision that is considered to lack an evident and intelligible justification - Li at [76] per Hayne, Kiefel (as her Honour then was) and Bell JJ.
4. We also note that Ground 5 incorrectly attributes to the Tribunal in the paragraphs relied upon by the appellant a finding that the appellant did not provide any evidence of unconscionable, misleading or deceptive conduct in the paragraphs identified in the principal decision. Paragraphs [102]-[104] of the principal decision rejected the specific allegations of wrongful conduct made by the appellant and [115] of the principal decision relates to causation.
5. At [102]-[104] of the principal decision the Tribunal said: "102 Then it is submitted (by the appellant in her written submissions) in paragraphs 57 to 59: 'A synthesis of the above clauses of the Disclosure reveals the inherent unconscionability of the Lease: The mechanical ventilation is not functional and not even connected to power and non-compliant with Building Code of Australia, while the fire exits are illegal, yet SFV must repair and maintain the ventilation, while it remains the property of Oldstream, who at the outset of a Lease advertise that the property is ready to occupy but there no outgoings [sic] for SFV to commence the Lease. In short this Disclosure is a self serving illegal nonsense in the context of the equipment failure for the main value of the Property being its commercial kitchen. Similarly the Lease terms are contrary to the advertised uses for the lease of the Property as per the disclosure - refer pp451 - 490 JTB.' 103 The reference to TB451-490 is the lease. This reference certainly does not support a finding that the lease terms are contrary to the advertised uses as per the disclosure, it is merely a reference to the lease. Nothing is proved by these submissions. If they were attempting to have the Tribunal accept there was some inconsistencies between the lease, disclosure statement and/or some aspect of the advertisement for the property, these unnamed inconsistencies have not been established. Even if they were, this does not prove the lessor engaged in unconscionable conduct or misleading or deceptive conduct in connection with the lease. 104 The lessee then complains about the development approval for the property (paragraphs 60 to 64) concluding in paragraph 65: 'At all material times [the then real estate agent] and and [sic] legal advisers to Oldstream knew, or ought to have known, that: a) SFV was re-locating her retail shop from her previous leased shop with non refundable deposit and security bond to the new shop lease at the Property, and there was a sensitive financial transition from her old to new Lease at the Property dependant from the outset on the commercial kitchen being functional for a co-occupant. b) The commercial kitchen was non functional at the time the Lease of the Property was entered into.'"

Ground 6

1. The appellant submitted that the Tribunal erred in law (at [75]-[87], [108] and [110] of the principal decision) in finding there was no jurisdiction to consider the alleged breaches of the ACL and cited Webb v Flight Centre Travel Group Limited [2021] NSWCATCD 31 in support.
2. In Webb the Tribunal referred to the jurisdiction granted to the Tribunal by the Fair Trading Act 1987 (NSW) (the "FTA") to decide consumer claims which may arise under a law of NSW which, by reason of s 28 of the FTA, includes the ACL.
3. As the appeal in relation to causation was dismissed, and that dismissal is dispositive of any case for damages reliant on an allegation of wrongful conduct under the ACL which may sound in damages recoverable in the Tribunal as allowable under the FTA [pursuant to s 79N(a)], we need not consider this ground any further.
4. Put another way, if the Tribunal did have the jurisdiction alleged, and the breaches alleged occurred, the appellant did not prove that any breach caused her the damage alleged. As her appeal on causation is dismissed, the appellant would remain unsuccessful on this appeal even if this ground were upheld.
5. The other remedy sought by the appellant for alleged breaches of the ACL and RTA was a declaration that the lease was void (presumably ab initio).
6. Whilst such a remedy could be granted by a court in an appropriate case, the Tribunal does not have jurisdiction to grant that remedy.
7. The Tribunal is a statutory body which can only do those things which are authorised by statute. The two prime sources of that statutory authority are the NCAT Act and certain NSW statutes.
8. Some statutes, such as the Residential Tenancies Act 2010 (NSW) supply both the cause of action and the Tribunal's jurisdiction to hear cases and provide the relief referred to in that statute. The RLA is a similar statute in that it authorises the Tribunal to grant certain relief for "retail tenancy claims" in s 72 and unconscionable conduct claims in s 72AA. Neither of those sections authorise the Tribunal to declare a lease void. The only authority granted to the Tribunal is to declare any provision made by a lease to be void for being inconsistent with the RLA or the regulations, but that was not the appellant's case (nor could it have been on our understanding of the facts).

Ground 7

1. The appellant submitted that the Tribunal erred in law (at [114] of the principal decision) by wrongly deciding the application of the adverse inference principle in Jones v Dunkel.
2. At [114] of the principal decision the Tribunal expressed criticism of the appellant's solicitor's understanding of the principle of that case, but the Tribunal did not, in fact, express any finding or holding in relation to any Jones v Dunkel point. It might charitably be inferred (in favour of the appellant) that the Tribunal rejected the appellant's submissions that various Jones v Dunkel inferences should be drawn against the respondent for not calling various witnesses. However, there is no rule that if certain witnesses are not called the adverse inference must be drawn, only that such inferences may be drawn.
3. It is obvious that the Tribunal was not persuaded that any Jones v Dunkel inference should be drawn in the circumstances of this case and no error has been identified in that decision for the following reasons.
4. First, even had such inferences been drawn they would not have assisted the appellant's case given the Tribunal rejected her testimonial evidence and dismissed her causation case. An inference that the identified witnesses would not have assisted the respondent's case would not have overcome the deficiencies in the appellant's case. That is because it was for the appellant to prove a connection between the alleged wrongful conduct and the loss of the prospective sub-tenants and not for the respondent to prove the opposite.
5. That leads to the second reason. The rule only applies where a party is "required to explain or contradict" something - Cross on Evidence, online edition, at [1215]. What a party is required to explain or contradict depends on the issues in the case and no inference can be drawn unless evidence is given of facts "requiring an answer". It is readily apparent that the Tribunal did not consider that there were any facts requiring an answer, nor did the appellant identify any such facts in its submissions.
6. Third, the rule cannot be applied to the non-calling of a witness unless it would be natural for the party to have called the witness, or the party might reasonably be expected to have called the witness. None of the witnesses identified in the appellant's submissions, such as previous tenants, would seem to fall within this category.

Ground 8

1. The appellant submitted that the Tribunal erred in law by finding (at [38], [53]-[60], [116], [122] and [125] of the principal decision) that the appellant was not a witness of credit.
2. The appellant's submission was: "The Tribunal erred in law by finding for instance at [38], [53-60], [116], [122) and in effect [125] relating to her own evidence of co-occupants rejecting the non-functional kitchen, that (the appellant) is not a witness of truth effectively in breach of s.71 (criminal offence) in the NCAT Act, including a finding there is no principle of law that a person of hitherto good character with no prior criminal record, such as (the appellant), may be presumed a witness, of truth, and thereby the Tribunal failing to consider the good character evidence of (the appellant) in (the various circumstances which followed)."
3. The appellant cited the following passage from the Civil Trials Benchbook published by the NSW Judicial Commission at [4-1310]: "If evidence of good character is adduced, it has been held that it is necessary to direct the jury that such evidence should be borne in mind as affecting the likelihood that the accused committed the crime charged and, if thought appropriate, that it is relevant as supporting any explanation given by the accused and his credibility as a witness: R v RJC (unrep, 1/10/1998, NSWCCA), at 27. See also R v Lewis [2001] NSWCCA 345 at [31]-[32]."
4. No error of law is identified in the appellant's submission (nor in the ground of appeal). It is not an error of law if the appellant simply says that the Tribunal made an incorrect finding (in this case, as to credit). The appellant did not identify any question of law, nor did she identify any other recognised ground of appeal for which leave to appeal may have been sought.
5. We will assume the question of law raised is whether the Tribunal applied the correct principle of law to the issue of the appellant's credibility.
6. If that is so, then the submission is misconceived.
7. The appellant submits that she should have been presumed to have been of good character because she had no prior criminal convictions and (impliedly) that no other finding could be made whatever the other evidence and cross-examination may have revealed.
8. There is no "presumption" of good character as the appellant submitted. Evidence of good character may be admitted for certain purposes in certain cases, but it is only (in those cases) admissible and does not give rise to any "presumption". Once admitted, any evidence of good character is weighed together with other evidence (of bad character) for the decision-maker to consider in assessing the witness's credibility.

Ground 9

1. The appellant submitted that the Tribunal's decision was unreasonable (per Li) by not finding that the preponderance of evidence showed that the respondent was guilty of unconscionable and deceptive conduct under the RLA.
2. This ground does not raise a question of law, and the submission as to "preponderance" of evidence does not fall (in this case) within the principles of Li. Li stands for the proposition that a decision lacking an evident and intelligible justification may be set aside - Li at [76] per Hayne, Kiefel and Bell JJ - not whether such a decision could be set aside because it was not consistent with the preponderance of evidence.
3. In any event, the preponderance of evidence in this case favoured the respondent and not the appellant. Putting aside the credibility finding against the appellant, the respondent's case was supported by objective evidence, contemporaneous documents and the apparent logic of events, factors which the High Court said should be generally preferred to recollection evidence - Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [31] - and upon which the Tribunal expressly relied in coming to its decision.
4. On the other hand, the appellant's case relied almost exclusively on her recollection evidence, which was, in important respects, contrary to the objective evidence, contemporaneous documents and the apparent logic of events.
5. One example is well illustrated in the Tribunal's reasons at [58] of the principal decision. The Tribunal said: "The lessee's repeated attempts to deny King & Wood Mallesons acted for her on the lease transaction further reduced her credibility. ... The lessee was represented by King & Wood Mallesons for the purposes of the lease negotiations, whether she chose them because a friend worked there or whether she paid reduced fees or anything else, they acted for her. They accepted service of documents on her behalf, for example the disclosure statement, they provided her with advice and they communicated with the lessor's lawyers on her behalf. Her repeated denials that King & Wood Mallesons was her lawyer or acted for her cannot be believed and reduce her credibility further."
6. This discrepancy between the parties in terms of the objective evidence, contemporaneous documents and the apparent logic of events, and the appellant's predominant reliance on her recollection evidence, is well exampled by the evidence led in relation to causation and the alleged lost proposed sub-tenants, a matter to which we will now turn in Ground 11. In short, no error has been established in the Tribunal's reasoning in considering the preponderance of evidence (or weight) which favoured the respondent and not the appellant.

Ground 11

1. The appellant submitted that the Tribunal erred in law (at [119] and [128]-[131] of the principal decision) by failing to consider relevant factors and unreasonableness (sic) as to the cause of the appellant's proposed sub-tenants not proceeding with the proposed sub-lease.
2. The appellant's causation case was that she had failed to secure sub-tenants because of the respondent's wrongful acts and omissions. The Tribunal (at [113] of the principal decision) did not accept that: "… the supposed issues or deficiencies with the premises played any material part in her being unable to sub-let the kitchen space to prospective sub-tenants. The Tribunal agrees with the lessor when it submitted, at paragraph 51 of its reply submissions, that this 'is fatal to all of Ms Freeman's claims for pecuniary relief'."
3. As we have mentioned earlier, the Tribunal is not required to refer to all of the evidence in its reasons and thus the submission that the Tribunal did not consider relevant evidence goes nowhere unless the appellant demonstrated that critical or significant evidence was overlooked (which she did not).
4. In any event, the appellant's evidence on the point was limited to her testimonial evidence. There was no objective or contemporaneous evidence which supported her case - and none was identified in the appellant's submissions - nor was she assisted by the apparent logic of events. Rather, such evidence supported the respondent's case on causation. As the Tribunal said at [117] of the principal decision: "The only evidence the lessee has about losing the potential sub-tenants are her assertions, which are contrary to contemporaneous, documentary evidence. Those assertions are not accepted by the Tribunal. As the lessor wrote at the time (May 2019), the reason people were not interested in renting the kitchen was because the roof terrace could not be used, a fact the lessee knew well before entering the lease."
5. In the circumstance of this reliance by the appellant on her recollection evidence, the absence of any corroborative objective or contemporaneous evidence, the appellant's lack of credibility and where no evidence was called from the alleged lost sub-tenants as to why they did not proceed with the sub-leases, the Tribunal's decision on this point was open to it and no error was shown.

Ground 12

1. The appellant submitted that the Tribunal erred in law for breach of procedural fairness for bias against the appellant and her solicitor.
2. The appellant listed in her submissions numerous matters which it said supported her claim of bias, although she never identified whether she was asserting actual or apprehended bias. As her list included various observations and findings contained in the Tribunal's reasons, we assume the appellant is asserting actual bias (since the time for "apprehension" had passed and no application for recusal was made prior to the publishing of the principal decision).
3. Gleeson JA set out a summary of the principles relating to actual bias in Collier v Country Women's Association of New South Wales [2018] NSWCA 36 Gleeson JA at [27]. His Honour said (footnotes omitted): "[27] In Reid v Commercial Club (Albury) Ltd, the following summary of principles was stated: '[68] A finding of actual bias is a grave matter: Sun v Minister for Immigration and Ethnic Affairs (1997) (Sun v Minister ) 81 FCR 71 at 127 per Burchett J. Authority requires that an allegation of actual bias must be distinctly made and clearly proved; that such a finding should not be made lightly; and that cogent evidence is required: South Western Sydney Area Health Services v Edmonds [2007] NSWCA 16 at [97] and the authorities there cited. [69] Where the issue is actual bias in the form of prejudgment, the appellant had to establish that the primary judge was "so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented": Minister for Immigration & Multicultural Affairs v Jia Legeng [2001] HCA 17; 205 CLR 507 at [72] per Gleeson CJ and Gummow J (Hayne J agreeing at [176]). See also Kirby J at [127]. [70] As Gleeson CJ and Gummow J observed in that case at [71]: 'The question is not whether a decision-maker's mind is blank; it is whether it is open to persuasion.' [71] In the same case, Hayne J noted at [185] the several distinct elements underlying the assertion that a decision-maker has prejudged or will prejudge an issue, or the assertion that there is a real likelihood that a reasonable observer might reach that conclusion. The first is the contention that the decision-maker has an opinion on a relevant aspect of the matter in issue in the particular case. The second is the contention that the decision-maker will apply that opinion to the matter in issue. The third is the contention that a decision-maker will do so without giving the matter fresh consideration in light of whatever may be the facts and arguments relevant to the particular case. [72] His Honour observed at [186] that allegations of actual bias through prejudgment often fail at the third step he had identified. This was because notwithstanding whatever expression of preconceived opinions by the decision-maker, it does not follow that the evidence will be disregarded. [73] The test of actual bias in the form of prejudgment requires an assessment of the state of mind of the judge in question: Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427; [2011] HCA 48 at 437 [33]. However, actual bias need not be confined to an intentional state of mind. Bias may be subconscious, provided it is real: Bilgin v Minister for Immigration & Multicultural Affairs (Bilgin v Minister) (1997) 149 ALR 281 at 289-290 per Finkelstein J; Sun v Minister at 127 per Burchett J and 135 per North J. As Finkelstein J said in Bilgin v Minister at 290: 'The wrong involved is the failure to decide a case impartially. Whether that failure was deliberate or not should be beside the point insofar as the validity of the decision is concerned.'"

Ground 15

1. The appellant submitted that the Tribunal erred in law (at [137]-[139] of the principal decision) by not finding unconscionable conduct (under the RLA) and not finding a major failure (under the ACL).
2. In support of this submission the appellant relied upon the evidence of Mr Boers to the effect that, in his opinion, there had been some alterations in the premises which affected the fire exit paths which "may" (not "did") have compromised the safety of anyone using that space, and that the premises did not have "all required approvals".
3. It is not clear whether the Tribunal directly addressed this allegation in terms of whether it amounted to unconscionable conduct (to have leased the premises to the appellant whilst those alleged defects existed). But the allegation goes nowhere because even if the matters alleged amount to unconscionable conduct, the Tribunal found that the appellant did not prove that that unconscionable conduct caused the appellant any damage.
4. The Tribunal said: "137 Mr Boer's evidence tried to establish an issue with the fire exit paths in the premises. Even if the Tribunal accepted this was an issue, which the lessee discovered after vacating the premises, there is no proof that this had any bearing on the potential sub-tenants choosing not to rent the kitchen. It also has no bearing on the lessee's business as she never intended to use the kitchen in her own clothing business. The only risk from this alleged fire exit issue was the potential for the local council to take some action about it: 3 hrs, 58 mins to 4 hrs. 138 There is no evidence that the local council took any steps towards enforcement action while the lessee was in occupation of the premises. 139 Even if this fire exit issue was proved and impacted the lessee's ability to trade she could have relied on the 'out clause' namely Part 25 of the lease: TB487-488. … 148 There is no evidence to support a finding that the lessee could not rent out the kitchen "as a result of' or "because of' or "by reason of' any act or omission of the lessor or otherwise because of any unproved issues with the fire exits or kitchen equipment."
5. Insofar as the appellant's causation case was encompassed by Ground 11, we have dismissed that Ground and therefore this ground, even if made out, would go nowhere. Insofar as the appellant's causation case on this ground went beyond the matters alleged in Ground 11 (it is not clear to us that the appellant's causation case did include fire safety issues as they are not mentioned in the appellant's "Table of evidence by appeal grounds - SFV v Oldstream NCAT Appeal Panel 3/12/21" in relation to Ground 11), no appeal point is taken in relation to the findings we have set out at [129] above and we were not taken to the evidence (if it existed) to support that causation case.

Ground 16

1. The appellant submitted that the Tribunal erred in law in failing to consider certain alleged relevant factors (namely bushfire smoke and the Covid-19 pandemic).
2. The ground fails because, contrary to the submission, they were considered.
3. The Tribunal said: "25 It must be remarked that the presentation of the lessee's case did not assist the Tribunal to resolve the proceedings in a quick, just nor cheap manner which was in complete contrast to the assistance the lessor's representatives gave the Tribunal. The lessee raised matters in her written submissions which were not raised in the final hearing, such as … Another example is stating, for the first time in closing written submissions, that the "Tribunal may properly take notice of factors arising in the retail market in December 2019 to February 2020, a period in which the lessee admitted her business had long since "failed" despite paying no rent at that time. These factors were submitted to include the bushfires in NSW and the Covid 19 emergency which the lessee either erroneously or misleadingly submitted started "hard and soft lock downs from mid February 2020 onwards": paragraph 12. There is absolutely no evidence that the bushfires impacted the lessee's business and there were no lockdowns in NSW (or elsewhere in Australia) until mid-March 2020, about a month after the lessee vacated the premises. In any event, it is unknown how the lessee wanted the Tribunal to use findings that the bushfires and Covid impacted the lessee's business in any way. The lessee submitted "SFV would have provided evidence of these matters with sufficient notice": paragraph 13. Notice of what? Notice by the Tribunal to the lessee in case the lessee thought of more possible causes of action after the end of the final hearing of her second claim? In any event it would be unlikely any evidence could prove a link between regional bushfires with an inner city retail lease or a pandemic which impacted retailers about a month after this lessee vacated her premises. Furthermore it is impossible to guess how the bushfires or a pandemic could be the basis of the lessor compensating the lessee for misleading or unconscionable conduct. Is the suggestion the lessor knew there would be regional bushfires or a pandemic in China (in February 2020 as there was no pandemic in NSW in February 2020), and failed to tell the lessee about these? … 144 In a request for rent reduction sent to the lessor on 28 November 2019, when she had already stopped paying rent, she cited her inability for using the roof terrace as the reason she should get a rent reduction: TB847-848. She did not mention any ventilation or rangehood issues, nor did she mention the newly invented justifications for her business failing raised for the first time in her closing written submissions namely bushfires."

Conclusion

1. As all grounds of appeal in the principal appeal have failed the appeal should be dismissed

The Costs Appeal

1. Ground 17 of the principal appeal related to costs and will be dealt with now. The grounds of the costs appeal will be dealt with after that.

Ground 17 of the principal appeal

1. Ground 17 said that orders 4, 5, 6 and 7 of the Tribunal erred in law for "unreasonableness".
2. As there are orders numbered 1-7 in the principal decision, and only orders numbered 1-4 in the costs decision, we assume Ground 17 refers to orders 4-7 of the principal decision. Those orders were: "4. Oldstream Pty Ltd may make a cost application for costs in any or all of proceedings COM20/31056, COM20/44840 and COM20/07370. This must be filed and served by 27 September 2021. Any evidence, such as Calderbank offers, which are relied on in the cost application, must be attached to the submissions. 5. If Ms Freeman-Vagg opposes the cost orders sought, she is to file and serve her submissions by 11 October 2021 setting out the basis upon which she opposes the cost order. 6. Both parties to express their attitude to the Tribunal disposing of a hearing on costs and determining the cost application on the papers. 7. If no cost application is made, the Tribunal will order Ms Freeman-Vagg pay Oldstream Pty Ltd's legal costs of COM20/44840 on the ordinary basis, as agreed or assessed."
3. Orders 4-6 were directions, and we do not understand what possible legal error could or did arise from the making of those directions. A costs application was made, and so Order 7 became otiose.
4. The appellant submitted that Orders 4-7 "are premised on unreasonable and/or unlawful findings about the presentation of the Court Book and the conduct of the matter in" (a number of circumstances were then cited but need not be set out here).
5. We reject this submission. The directions were made because the appellant was unsuccessful in the second and third proceedings and withdrew the first proceedings. Hence, the respondent was entitled to make an application for costs and the directions were made to ensure procedural fairness for the parties in determining the costs applications.

The Tribunal's Costs Decision

1. It will be recalled that the third proceedings (when the appellant was legally represented) were essentially a repeat of the first proceedings (when the appellant was not legally represented and withdrew her claim at the end of the hearing). There was no substantive defence to the second proceedings (the respondent's claim for arrears of rent) other than the off-setting claims made by the appellant in the third proceedings.
2. Given that context, the Tribunal determined the costs issues in the third proceedings first, then the first proceedings (on the basis there was substantial overlap between the first and third proceedings), and then the second proceedings.
3. In the third proceedings, the Tribunal ordered the appellant to pay the respondent's costs on the indemnity basis as agreed or assessed. The Tribunal correctly held that as the appellant claimed more than $30,000 rule 38 of the Civil and Administrative Rules 2014 (the "NCAT Rules") applied, thus displacing the need to prove special circumstances.
4. The first relevant principle (applied correctly by the Tribunal) in such a case is that costs should generally follow the event unless there be good reason to the contrary such as the existence of disentitling conduct by the respondent.
5. The Tribunal went further and accepted the respondent's submissions, based principally upon a number of passages in Mendonca v Tonna [2017] NSWCATAP 176 at [60]-[64], that the respondent should be awarded indemnity costs.
6. In relation to the costs of the third proceedings the Tribunal said: "37 The Tribunal accepts that the lessee's application was groundless, without substance, hopeless or so weak as to be futile. The Tribunal detailed its assessment of the lessee's hopeless claim throughout the Decision including at [119], [122], [125) and [148]. 38 The Tribunal accepts that the second application was essentially the same as the first application, which the lessee withdrew at the last moment, after the final hearing was concluded, and therefore accepts that the second set of proceedings unnecessarily prolonged the proceedings and constituted unreasonable conduct. 39 The Tribunal already accepted at [54], [56], [58)]and [59] that the lessee altered her evidence and was not wholly honest under her affirmation, and assessed the lessee as "dishonest, evasive and unreliable" at [116]. 40 The Tribunal accepts it should, in the exercise of its discretion, made an award of costs in the lessor's favour on the indemnity basis. The circumstances outlined by the Appeal Panel in Medonca v Tonna have been made out and given the conduct of the matter it is appropriate the lessor should have its costs on an indemnity basis."

The Grounds of the Costs Appeal

1. The grounds set out in the Notice of Appeal in the costs appeal were: "The Costs Decision is wrong by reason of the errors of law, and unfairness / unreasonableness, as outlined in the reasons for main appeal 2021 /00283619 set for hearing on 2.15pm 14/1 /22 ("Main Appeal"), of the decision 6/9/21 (the "Decision"). In particular false premises in the Costs Decision include: 1. At [7], the Tribunal notes appellant's costs submissions dated 11/10/21 yet omits at [4] of those submissions "'a copy of the [Main Appeal 5/10/21] grounds are attached, which includes a list of new material sought to be allowed with leave of the Appeal Panel" being 35 pages long. The Tribunal claims - at [22], [7] and [24] and implicitly at [32] - to not have seen any of this 35 page document relating to recusal of that Tribunal Member on the matter of costs (e.g. bias on face of the record) to find the Tribunal (not the Appeal Panel) may make the Costs Decision: Refer [27] to [30]; 2. Appellant's expert evidence (Saz and Zadravec) is excluded in circumstances where the standard direction notice for witnesses to be duly notified was not followed by Oldstream, with that exclusion relied upon by the Tribunal finding at [37-38], [48]. Boers expert planning evidence of illegal removal of fire exits is also ignored; 3. Evidence of the appellant herself is excluded despite prior good character, and corroboration from independent materials, including Saz and Zadravec Expert Evidence ([39] Costs Decision); 4. Uncritical adoption of Oldstream submissions mis-describing the appellant case as "hopeless" and "groundless" and "without substance" at sub paragraphs 11-15 of [34] and for example [37] [48] and [49] after unreasonable exclusions of expert evidence; 5. Finding the solicitor for the appellant had no grounds for the "second application" at [41], [48-49], which was "essentially the same as the first application" by the appellant (at [38]) who in fact at that earlier time was unrepresented, with no sworn evidence or legal submissions regarding absence of real estate agent as witness for Oldstream (Jones v Dunkel)."
2. The Notice of Appeal also sought leave to appeal on the following basis: "1. By reason of the grounds of this appeal of the Costs Decision outlined above - for example failure of the Tribunal to take into account the 35 page Main Appeal grounds submitted with its costs submissions on 11 October 2021 - refer this critical omission in Costs Decision at [22] and [7] and [24] and implicitly at [32] - to the effect of not receiving any of the 35 page document highly relevant to recusal by the Tribunal Member on the matter of costs - for example bias on face of the record - and then finding the Tribunal (not the Appeal Panel) should make the Costs Decision - refer [27] to [30]; 2. By reason of the grounds of the Main Appeal dated 5/10/21, for breach of procedural fairness including bias, and errors of law, such that the Decision (6/9/21) should be overturned, and thus it follows the orders in the Costs Decision are also unfair and unjust."

Ground 1

1. As the principal appeal failed the identified basis for this ground is not made out.

Ground 2

1. None of the matters identified in Ground 2 are relevant on the question of costs and this ground must be dismissed.

Ground 3

1. The alleged material error of fact relied on by the appellant does not exist. The first and third proceedings were, in substance, essentially the same and that observation was not incorrect. The fact the appellant was unrepresented in the first proceedings is irrelevant, and the submissions referred to (such as that concerning Jones v Dunkel) have not been accepted on this appeal and thus were not wrongly ignored by the Tribunal.

Ground 4

1. There was no basis for the Senior Member to have recused herself from deciding the question of costs. Bias was and has not been established, and it is by far the preferable course for the Tribunal which decided a matter to decide the question of costs even if an appeal from the principal decision been lodged prior to any decision on costs.

Conclusion

1. As all grounds of appeal in the costs appeal have failed the appeal should be dismissed.

Costs of the Appeals

1. On both 29 October and 21 December 2021, the Appeal Panel (differently constituted) directed both parties to include with their principal submissions any submissions on costs they desired to make in respect of the appeals.
2. In his submissions dated 17 December 2021 and 24 January 2022 the respondent sought costs against the appellant in both appeals on the indemnity basis, and that there be an order that the appellant's solicitor be jointly and severally liable to the respondent for those costs. Submissions were made in support of those orders.
3. The appellant replied to the costs submissions of the appellant dated 17 December 2021 in her written submissions dated 10 January 2022, and by email to the Tribunal and the respondent's solicitors dated 29 January 2022. The matter of costs was also the subject of oral submissions at the hearing of this appeal.
4. As we have earlier noted, the principal appeal was really two appeals, being appeals from the decision made in each of the second and third proceedings, and the costs appeal was really three appeals, being appeals from the decision on costs in each of the first, second and third proceedings.

Costs of the Principal Appeal

1. As for the principal appeal, the only substantive argument related to the decision dismissing the third proceedings (the appellant's counter claims), it being the only answer to the respondent's claim for outstanding rent in the second proceedings. Therefore, as a matter of substance, we shall treat the principal appeal as one appeal even though it concerned more than one, separate proceeding before the Tribunal at first instance.
2. The respondent submitted, and we accept as correct, that the amount claimed or in dispute in the principal appeal was greater than $30,000. This was because the appellant's claim for compensation in the Tribunal in the third proceedings was for a sum greater than $30,000 and the order she asked (in the appellant's written submissions) the Appeal Panel to make if successful on appeal was for the sum of approximately $122,000.
3. It follows that, per Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25, we may award costs in the principal appeal even in the absence of special circumstances. The appellant does not submit to the contrary.
4. In such cases the ordinary rule is that costs follow the event, and no submission has been made against that proposition, nor was any submission made that the respondent was guilty of some disentitling conduct.
5. The real questions are whether those costs should be on the indemnity or ordinary basis and whether the appellant's solicitor should be jointly and severally liable for those costs.

Indemnity Costs

1. The respondent cited Mendonca on the appeal (as it had at first instance) and particularly paragraphs [60]-[64] in support of its application for indemnity costs. In those passages the Appeal Panel said: "60. Other than in relation to the unreasonable refusal of a genuine offer of settlement, one circumstance in which indemnity costs may be awarded is when a case is commenced or continued where there is no chance of success (Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No 2) [2009] NSWCA 12 at [4]), such as where the claim is "without substance", "groundless", "fanciful or hopeless" or so weak as to be futile, such as where a limitation period is obviously at an end: Hillebrand v Penrith Council [2000] NSWSC 1058. However, mere weakness of a case will not be sufficient to warrant an exercise of the discretion to award indemnity costs: Wentworth v Rogers (No 5) (1986) 6 NSWLR 534. 61. In this case, Dr Mendonca's fundamental case is that she has a residential tenancy agreement with Mr Tonna and that he owes a significant amount of rent arrears. While some aspects of the proceedings before the Tribunal clearly lacked merit - in particular the application to reinstate proceedings that had been withdrawn - we do not consider that her case overall was so weak that it would have had no chance of success had her applications not been withdrawn. 62. Another circumstance which may warrant an order for costs on an indemnity basis is where the proceedings amount to an abuse of process: Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359 at 362. Examples of abuse of process include where the proceedings are commenced other than in good faith or for an ulterior or collateral purpose: Palmer v Gold Coast Newspapers Pty Ltd [2013] QSC 352; Packer v Meagher [1984] 3 NSWLR 486 at 500. Regardless of whether there is in fact a residential tenancy agreement between the parties, we are not satisfied that Dr Mendonca's applications either individually or collectively were made in bad faith or amount to an abuse of process. 63. An award of indemnity costs may also be made for unreasonable conduct. Such conduct may include unnecessarily prolonging the proceedings, (Degmam Pty Ltd (in liq) v Wright (No 2), at 358); unfounded allegations of fraud or improper conduct (Maule v Liporoni (No 2) (2002) 122 LGERA 216 at 229); deliberate or high-handed conduct (Rouse v Shepherd (No 2) (1994) 35 NSWLR 277) and behaviour which causes unnecessary anxiety, trouble or expense, such as the failure to adhere to proper procedure (FAI General Insurance Co Ltd v Burns (1996) 9 ANZ Ins Cas 61-384). Disregard of court orders may justify an indemnity costs order (O'Keefe v Hayes Knight GTO Pty Ltd [2005] FCA 1559 at [35]). Perverse persistence by an unrepresented litigant with a hopeless application may also do so: Rose v Richards [2005] NSWSC 758. 64. Misconduct of a serious nature, such as fraud, perjury, contempt or dishonest conduct may also justify costs being awarded on an indemnity basis: Berkeley Administration Inc v McClelland [1990] FSR 565 at 568-569; Ivory v Telstra Corporation Ltd [2001] QSC 102); Vance v Vance (1981) 128 DLR (3d) 109 at 122."

Costs Against a Non-Party Solicitor

1. The NCAT Act authorises us to "determine by whom and to what extent costs are to be paid" - s 60(4)(a) of the NCAT Act - but is otherwise silent as to whom "by whom" refers and as to the principles to apply in exercising that discretion if it is to be exercised against non-parties.
2. There are only four decisions in the Tribunal on this question that the parties have cited or that our researches have found.
3. After a brief discussion of these four cases we will first turn to the issue of whether there is power to award costs against a non-party (which would include legal practitioners), and then the principles to apply to costs applications against non-parties (generally speaking) followed by the principles to apply to costs applications against legal practitioners specifically.
4. A single Senior Member of the Tribunal considered that the Tribunal had power to make such an order in Diaspora Holdings Pty Ltd v The Owners - Strata Plan No. 68608 [2018] NSWCATCD 52. The Tribunal considered the differences between s 60(4)(a) of the NCAT Act and s 98(1)(b) of the Civil Procedure Act 2005 (NSW) (the "CPA") which was in the following terms: (1) Subject to rules of court and to this or any other Act - (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.
5. After noting that the word "full" preceded the word "power" in s 98(1)(b) of the Civil Procedure Act 2005 (NSW), but does not do so in s 60(4)(a) of the NCAT Act, the Tribunal said: "113. Further, I find that the NCAT Act does not limit an award of costs to be made against a party only and that in consequence the Tribunal does have power to make a costs order against the solicitors even though they are not a party to the proceedings. Subsection 60(4) confers a power upon the Tribunal to determine: "by whom and to what extent costs are paid". I respectfully adopt the NSW Court of Appeal's interpretation of that statutory language (also used in s 98(1)(b) of the Civil Procedure Act) as extending to non-parties: Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34 at [33]."
6. The Tribunal did not discuss what principles ought to apply to the exercise of that power, perhaps because the circumstances were simple in that the solicitor was held not to have had valid instructions to commence proceedings for a party. Such reflects the general law position in those circumstances. As Emmett AJA observed in Australian Federation of Islamic Councils Inc v Farrell [2016] NSWCA 256 at [30]: "Ordinarily, where solicitors commence proceedings without a proper retainer and the commencement of the proceedings is not ratified, it should be common for an order for costs to be made against the solicitors in favour of the defendant. In such circumstances, the defendant has been brought to court and incurred costs in proceedings that have been dismissed. Ordinarily, such a defendant would be out of pocket unless the solicitors who acted without instructions were required to bear the costs. However the question of costs is a matter for the exercise of discretion."

Costs of the Costs Appeal

1. The costs appeal, although the subject of a separate Notice of Appeal, should, as a matter of substance, be treated as part of the principal appeal.
2. Its outcome was, in a real sense, dependent upon the success or failure of the principal appeal, both written and oral submissions advanced in relation to it were proportionally small compared to the oral and written submissions advanced in relation to the principal appeal, and any costs orders in relation to it should be no different that would have been the case had the appellant simply amended her Notice of Appeal in the principal appeal to include the grounds set out in the costs appeal.
3. For those reasons, and for the reasons given in relation to the costs of the principal appeal, the appellant should pay the respondent's costs of the costs appeal on the ordinary basis. We do not accept the submission that costs should be on the indemnity basis, and do not accept that the appellant's solicitor should be held to be jointly and severally liable for those costs.

Orders

1. In appeal 2021/00283619: 1. Appeal dismissed. 2. The appellant is to pay the respondent's costs of the appeal on the ordinary basis.
2. In appeal 2021/00353172: 1. Appeal dismissed. 2. The appellant is to pay the respondent's costs of the appeal on the ordinary basis.

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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: 15 June 2022