Ghazal v Masterton Homes Pty Ltd

NCAT Appeal Panel|2018-11-01

Background

On 24 September 2018 we published our reasons for decision in this appeal. In so far as leave to appeal was required, such leave was refused and the appeal was otherwise dismissed. Directions were made for the filing and service of submissions as to the question of costs of the appeal. It was directed that, absent submissions to the contrary, the question of costs of the appeal would be dealt with on the papers, without a further oral hearing.
Each party has filed and served submissions on costs as directed. The appellant has not made any submissions requesting a further oral hearing. At [8] of its submissions, the respondent said: 8. The Respondent invites the Appeal Panel to appoint an oral hearing in relation to the costs of the Appeal insofar as that might be appropriate whereon the Respondent would expand upon the submissions made herein.
Section 50 of the Civil and Administrative Tribunal Act 2013 (the CAT Act) deals with when hearings are required. Relevantly, hearings are required except when the Tribunal makes an order dispensing with a hearing: s 50(1)(c). An order dispensing with a hearing may be made if the Tribunal is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering the written submission or any other document or material lodged with or provided to the Tribunal: s 50(2). Such an order may not be made unless the Tribunal has first afforded the parties to make submissions about the proposed order and taken those submissions into account: s 50(3).
We do not regard the respondent's submissions referred to above, as anything more than an invitation to appoint a further hearing if the Appeal Panel considers that might be appropriate. Even if the submission can be taken to be a request to appoint a further oral hearing, we have taken that submission into account in concluding that it is neither necessary or appropriate for a further oral hearing to be appointed. We have received the benefit of written submissions on the question of costs of the appeal and we are satisfied that this issue can be adequately determined in the absence of the parties by considering those submissions and the other material lodged with the Tribunal for the purposes of the appeal. Accordingly, we will make an order pursuant to s 50(2) of the CAT Act that a hearing on the question of costs of the appeal be dispensed with.

Relevant Principles

Ordinarily, costs of proceedings in the Tribunal are governed by s 60 of the CAT Act. That section provides that each party to proceedings in the Tribunal is to pay the parties' own costs unless there are special circumstances. The matters to be considered in determining whether there are special circumstances are set out in s 60(3).
However, as this appeal was lodged after 1 January 2016, Rule 38A of the Civil and Administrative Rules 2014 (the CAT Rules) provides that, in so far as the provisions of the rules which apply to the determination of the costs of the proceedings of the Tribunal (the first instance costs provisions) are different from the provisions of s 60 of the CAT Act, the Appeal Panel must, despite s 60 of the CAT Act, apply the first instance costs provisions. Here, the claim in the Tribunal by the appellant homeowners was for a sum in excess of $30,000. Rule 38 of the CAT Rules provides that for proceedings in the Consumer and Commercial Division where the amount claimed is more than $30,000, then despite s 60 of the CAT Act, the Tribunal may award costs even in the absence of special circumstances.
Accordingly, the Appeal Panel may award costs even absent special circumstances.
The principles applicable in awarding costs when Rule 38 applies were summarised in Nguyen v Perpetual Trustee Company Ltd [2015] NSWCATAP 264 at [94]-[95]. The Appeal Panel there said: 94. Rule 38 gives the Tribunal (or the Appeal Panel when making a decision in substitution for the decision under appeal), a discretion to award costs. While unfettered that discretion must be exercised judicially. 95. While the discretion to award costs under rule 38 is unfettered, in our view costs should generally "follow the event", recognising however that factors may exist that militate against the successful party recovering all of its costs: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [134]. Fairness dictates that the unsuccessful party typically bears the liability for costs unless it is demonstrated that some other order is appropriate: Currabubula and Paola v State Bank NSW. Currabubula v State Bank NSW [2000] NSWSC 232…

The Appellants' submissions

The appellants were wholly unsuccessful on every issue they raised on the appeal. They had failed to comply with directions of the Appeal Panel to have the appeal made ready for hearing. This necessitated them seeking leave to rely on material served out of time. Not all of that material was received on the appeal.
The appellants' submissions on costs, prepared by their solicitor Mr Pickering, seek to recite the history of the relationship between the parties and the proceedings in the Tribunal. They seek (once again) to agitate issues that were raised on the appeal but rejected. These issues include the events of the directions hearing of 14 December 2017. What happened at that directions hearing, following which the Tribunal made consent orders limiting the issues to be determined at the final hearing of the matter, was dealt with extensively in our reasons (see [37]-[56]). There is little point in reviewing those matters again and insofar as the appellants' submissions on costs seek to rely on factual matters we have not accepted, they do not assist. Nor do submissions that the appellants "have been hard done by" or that the respondent has "conducted itself in an outrageous manner" when there is no evidence to support such submissions.
Additionally, as explained above, it is not necessary for special circumstances to be found before the discretion to award costs is enlivened. As such, the fact that the appellants' case was not frivolous, vexatious or misconceived, is not determinative of the costs issue. At [19] - [20] of the costs submissions, the appellants submit: 19. The Appellants case was swept aside because of an interpretation of what was said or not said at the Directions Hearing [on 14 December 2017]. Affording justice to the Appellants took a back seat to procedural interpretation and haste to finalize (sic) the case before NCAT. 20. …the Appeal Panel Tribunal should not depart from the normal costs principle which is each party pay its own costs. The Appeal Panel Tribunal will find that there are no special circumstances warranting an order for costs to be made and indeed to award costs in favour (sic) of the respondent in light of the history of the proceedings would be harsh in the extreme and only unjustifiably enrich the Respondent in circumstances where it is demonstrably shown its behavior (sic) and delay has caused immeasurable cost and damage to the Appellant.
It can be seen that the appellants' submissions on costs do not address the correct test. Nevertheless, we will read them as submitting that in all of the circumstances of the case, and in light of the matters raised by them in those submissions, the proper exercise of our discretion with respect to costs would be that there be no order as to costs of the appeal.

The Respondent's submissions

The respondent's submissions on costs correctly identify the application of Rules 38 and 38A of the CAT Rules with the consequence that special circumstances need not be shown before the Appeal Panel may award costs. Despite this, they then address matters which would ordinarily go to a determination of whether special circumstances exist so as to award costs.
The respondent refers to the fact that the appellants were unsuccessful on each ground of appeal. They also submit that the appellants conducted the appeal unreasonably so as to prolong the time taken to complete the proceedings and require additional appearances. The respondent also refers to the failure of the appellant to comply with the directions made for the conduct of the appeal. The respondent submits that the appellants failed to conduct the appeal in an orderly manner so as to assist the Appeal Panel. The respondent submits an example of this is the appellants seeking to, in effect, appeal from the withdrawal of the Homeowners' Proceedings when those proceedings were withdrawn and dismissed and no notice of appeal was filed in those proceedings.
The respondent submits that costs should follow the event. The respondent sought an order that the costs it be awarded be in the sum of $38,054.69. Alternatively, it seeks costs of and incidental to the appeal on the indemnity, or alternatively ordinary basis as agreed or assessed.

Decision

We do not think there is any sufficient basis to find that the appellants conducted the appeal in a manner which would justify the award of indemnity costs. Nor do we think, having regard to the material we have received, that it is appropriate to order costs in a specified sum. There is not sufficient evidence for us to be satisfied that the amounts claimed ought be ordered as being reasonable.
There is some force in the submissions of the respondent that the appellants did not conduct the appeal as efficiently as they could have. We referred in our reasons to some of the difficulties the appellants faced having regard to the nature of the orders they sought on appeal and the manner in which they chose to do so. We also observe that each party was legally represented. As such, it is expected that the proceedings would be conducted more efficiently and with regard to compliance with directions made for the preparation and conduct of the appeal than if the appellants were litigants in person.
Having regard to matters we have referred to above and all of the submissions, we do not see any reason to depart from the usual rule in the exercise of our discretion. There is no reason, therefore, why costs should not follow the event.
We will order that the appellants pay the costs of the respondent of the appeal as agreed or assessed.

Orders

The orders we therefore make are: 1. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013, a hearing on the question of costs of the appeal be dispensed with. 2. The appellants pay the respondent's costs of the appeal as agreed or assessed.

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: 01 November 2018

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