GNZ Enterprises Pty Ltd v Carmody

NCAT Appeal Panel|2018-11-30

Background

This is an application for costs of an internal appeal under s 80(2) of the Civil and Administrative Tribunal Act 2013. The respondents applied for costs after we dismissed the appeal on 15 October 2018 for reasons that were given orally.
On 19 October 2018, we made the following directions to facilitate determination of the costs application. In these directions, "applicant" refers to the party who made the costs application (that is, the respondents to the appeal) and "respondent" refers to the party against whom the respondent seeks a cost order (that is, the appellant). 1. By 1 November 2018, the applicant is to provide to the respondent and the Tribunal, in person or by post, evidence and submissions in support of the costs application. 2. By 14 November 2018, the respondent is to provide to the applicant and the Tribunal, in person or by post, evidence and submissions in response to the costs application. 3. By 21 November 2018, the applicant is to provide to the respondent and the Tribunal any submissions in reply. 4. Submissions provided by the parties must address: (a) Whether special circumstances warrant an order for costs: see s 60 Civil and Administrative Tribunal Act 2013; and (b) Whether the costs application can be determined on the basis of the written material provided by the parties.

Submissions and evidence

Respondents' submissions

The respondents seek costs totalling $5,030.99, which are detailed in a Table of Costs provided with their submission. The claimed costs do not all relate to the appeal proceedings. Rather, the bulk of the costs relate to proceedings before the Tribunal. Costs that specifically relate to the appeal are: Train transport x 4 $80.00 Plane fare 1 $292.00 Plane fare 2 $292.00 Loss of income 1 $395.77 Loss of income 2 $395.77 Postage x 2 $42.00
A number of receipts and invoices were attached to the submission, although such documents have not been provided in respect of all of the costs claimed.
In summary, the respondents submit that:

They have incurred costs that should be reimbursed to them on the basis that special circumstances exist.
The Tribunal found that they were entitled to full reimbursement of the sum they paid to the appellant.
The appellant did not provide any evidence to refute their claim during the seven months of Tribunal proceedings.
Many of the claims made by the appellant during the proceedings were frivolous and vexatious; such as allegations of lying and of fabrication of evidence.
The appellant hindered their ability to facilitate the just, quick and cheap resolution of the real issues in the proceedings by offering unfounded claims based only on hearsay and opinion.
The respondents have suffered significant emotional and familial strain because of the proceedings.
The claimed costs represent only some of the overall costs they have suffered.

Appellant's submissions

The appellant's submission largely focuses on issues to do with the respondents' original application to the Tribunal, the Tribunal's decision and the Appeal Panel's decision, rather than on issues raised in the costs application. The only issues addressed in the submission that are directly relevant to the costs application are the submission at [6] that the respondent's receipts total only $2,152.67 and the query at [12] as to the necessity for both respondents to appear at the hearing. These parts of the respondent's submission go to whether the respondents have proved the quantum of their claim for costs and whether what they claim is reasonable.

Issues

The issues to be determined in the costs application are: 1. Should a hearing on costs be dispensed with? 2. What provisions apply to the costs application? 3. What should be considered in the costs application? 4. What legal principles are relevant to the costs application? 5. Have the respondents established that there are special circumstances that warrant an order for costs? 6. If so, on what basis should the costs order be made?

Should a hearing on costs be dispensed with?

Section 50 of the NCAT Act relevantly provides: 50 When hearings are required (1) A hearing is required for proceedings in the Tribunal except: … (c) if the Tribunal makes an order under this section dispensing with a hearing, or … (2) The Tribunal may make an order dispensing with a hearing if it is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Tribunal. (3) The Tribunal may not make an order dispensing with a hearing unless the Tribunal has first: (a) afforded the parties an opportunity to make submissions about the proposed order, and (b) taken any such submissions into account. (4) The Tribunal may determine proceedings in which a hearing is not required based on the written submissions or any other documents or material that have been lodged with or provided to the Tribunal in accordance with the requirements of this Act, enabling legislation and the procedural rules. …
The parties were given an opportunity to make submissions concerning whether costs could be determined on the papers. Neither party objected to that course of action.
We are satisfied that the issue of costs can be adequately determined in the absence of the parties by considering the parties' written submissions. The parties would be put to unnecessary expense if required to argue the costs application at a hearing. The order under s 50(1)(c) of the NCAT Act has accordingly been made.

What provisions apply to the costs application?

The general rule in relation to costs in the Tribunal is that unless special circumstances are established, the parties pay their own costs: s 60(1) and s 60(2) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act)
Section 60(3) of the NCAT Act sets out factors to which regard may be had in deciding whether there are special circumstances. These factors are: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3), (g) any other matter that the Tribunal considers relevant.
Rule 38 of the Civil and Administrative Tribunal Rules 2014 (the Rules) modifies the application of s 60 in proceedings before the Consumer and Commercial Division of the Tribunal and Rule 38A modifies the position in respect of appeals. The effect of Rule 38 is that where what is claimed or in dispute in the proceedings before the Consumer and Commercial Division exceeds $30,000 an award of costs can be made in the absence of special circumstances. The effect of Rule 38A is that on appeal, the same costs provisions apply as applied in the Tribunal below.
What was claimed in the proceedings before the Tribunal did not exceed $30,000. What was in dispute on the appeal also did not exceed $30,000. Rather, what was in dispute on the appeal was the sum of $21,500, which the Tribunal ordered the appellant to pay the respondent.
This means that s 60 of the NCAT Act applies to the costs of the appeal. We cannot make an order for costs unless we are satisfied that special circumstances warrant an order for costs. The respondents bear the onus of establishing that this is the case.

What should be considered in the costs application?

As noted above, the submissions and attached receipts and invoices provided by the respondents indicate that they are seeking the costs of the entire proceedings before the Tribunal, not just the costs of the appeal.
There is nothing before us to suggest that the respondents made an application for costs of the Tribunal proceedings. In such circumstances, it is not appropriate for us to determine the costs of those proceedings. We will only consider the costs of the appeal.

What legal principles are relevant to the costs application?

The term "special circumstances" is not defined in the NCAT Act. It has been interpreted to mean circumstances that are out of the ordinary but not necessarily extraordinary or exceptional. The discretion to award costs must be exercised judicially having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11].
In Alexander James Pty Ltd v Pozetu Pty Ltd (No. 2) [2016] NSWCATAP 75 at [14] the Appeal Panel stated: 14. An assessment whether circumstances are "special" involves the exercise of a value judgement carried out by way of comparison between what is not "special", and what is special. There are no scientific means by which the former can be ascertained. The evaluative process is necessarily one of impression informed by the particular provisions of section 60, which by sec 60(3)(f) incorporates also a consideration of section 36(3) of the Act.

Have the respondents established that there are special circumstances that warrant an order for costs?

The respondents' submissions suggest that the basis for their claim that special circumstances exist in relation to the appeal proceedings is the lack of merit in the appellant's case, together with the hardship that they and their family have suffered as a result of the appellant's conduct.
We are not satisfied that the appellant's conduct of the appeal gives rise to special circumstances. The appellant substantially complied with the procedural directions made at the callover and the conduct of the appeal was generally unremarkable. We are not satisfied that the respondents were disadvantaged by the manner in which the appellant conducted the appeal proceedings. Nor are we satisfied that the manner in which the appellant conducted the appeal prolonged the appeal proceedings.
In relation to the merit of the appellant's case on appeal, the fact that the appeal was dismissed and leave to appeal was refused does not of itself amount to special circumstances. While the appellant did not identify a question of law and we were not satisfied that leave to appeal should be granted, this does not mean that the appellant's case on appeal was unarguable. We are not satisfied that the relative strengths of the parties' cases amounts to special circumstances.
We have also had regard to other factors set out in s 60(3) in considering whether special circumstances exist. In relation to whether the appeal was factually or legally complex, we consider that the appeal proceedings were relatively straightforward. This is demonstrated by the fact that reasons for dismissing the appeal and refusing leave to appeal were given orally.
While we understand that the respondents feel aggrieved by the appellant's conduct of the proceedings in the Tribunal, we are not satisfied that the appeal was frivolous or vexatious. Whether the respondents should be awarded a full refund of the contract price was a genuine issue in the proceedings below. Had the appellant conducted the proceedings before the Tribunal differently, then the result may have been different. While the appellant's grounds of appeal were found to be without merit, this does not mean that the appeal proceedings themselves can be characterised as a frivolous or vexatious.
We have considered whether the appellant failed to comply with its duty under s 36(3) of the NCAT Act (that is, its duty to assist the Tribunal to resolve the real issues in dispute in the proceedings in a manner that is just, quick and cheap). As noted above, we are of the view that the appellant's conduct of the appeal proceedings was generally unremarkable. The appeal was lodged on 9 August 2018 and finalised on 15 October 2018. Although the appellant sought and was granted an extension of time to comply with procedural directions on one occasion, the respondents did not object to the extension, which in any event did not affect the hearing date. We conclude that the appellant did not fail to comply with its s 36(3) obligation in respect of the conduct of the appeal.
We have considered whether any other factors may amount to special circumstances. We accept that the proceedings were difficult for the respondents, or the more so because they have a child with a severe disability. However, litigation is usually stressful for the people who are involved in it. We also accept that the respondents incurred expenses - such as travel costs to Sydney - that are greater than would have been incurred if they lived in Sydney. However, the respondents could have applied to appear at the appeal hearing by telephone, rather than incur the costs involved in travelling to Sydney. We do not consider that either of these factors amounts to special circumstances.
We are unable to identify any other factors relevant to the appeal proceedings which amount to special circumstances warranting an order for costs.

Conclusion

We are not satisfied that the respondents have established that special circumstances warrant an order for costs of the appeal.

Orders 1. A hearing on costs is dispensed with in accordance with s 50(1)(c) of the Civil and Administrative Tribunal Act 2013. 2. The application for costs is dismissed.

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: 30 November 2018

At a glance

Court

Decision date

Source

Judgment (13 paragraphs)

Parties

Cases Cited (2)