Hafezi v Luff Pier Pty Ltd (No 2)

(1) the Tribunal had failed to accord procedural fairness by failing to take into account the Owner's relevant submissions that the tiles and flooring which had been used in the building work had been discontinued, that work limited to the scope of the work order would not lead to the result that the Owner was entitled to expect and that, as a result, compensation assessed solely by reference to the cost to comply with the work order would not put the owner in the position she would have been in if the contract had been performed;

(2) the Tribunal did not apply the correct test in the assessment of damages because it failed to consider what would be an appropriate order at the time of the renewal proceedings.

(1) Appeal allowed.

(2) Order 1 made by the Tribunal in proceedings 2022/00394284 (formerly HB22/56496) on 28 June 2024 is set aside.

(3) The proceedings are remitted to the Consumer and Commercial Division of the Tribunal for reconsideration consistently with these reasons and otherwise according to law on the evidence previously filed and such further evidence, including evidence updating evidence previously filed, as the Tribunal may allow.

(4) The parties are to file any written submissions in relation to the costs of the appeal within 14 days of the date of publication of these orders and are to reply to each other's submissions 7 days thereafter. Submissions are to include whether the issue of costs may be determined on the basis of the written submissions and without a hearing in accordance with s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW).

1. The effect of order 4 was that the parties were to file any written submissions in relation to costs by 8 July 2025 and to reply to each other's submissions by 15 July 2025.
2. On 8 July 2025 the Owner filed submissions seeking an order for costs in the appeal.
3. On 15 July 2025 the Builder sought an extension of time in which to provide reply submissions until 18 July 2025, on the basis that Counsel was unable to settle the submissions. The Builder then sought a further extension to 22 July 2025 apparently due to Counsel's ill health.
4. The Owner objected to the request for the extension of time and submitted that this was not an isolated delay in meeting deadlines and it reflected the Builder's broader patter of disregard for procedural timetables throughout the renewal proceedings. The Owner submitted that the Builder had had a reasonable opportunity to be heard and had failed to take it and that the Appeal Panel should proceed to determine the issue of costs on the basis of the written submissions already filed.
5. On 22 July 2025 the Builder filed submissions in response to the Owner's application for costs.
6. On 25 July 2025, the Owner provided further submissions. She justified the filing of these submissions on the basis that the Builder's reply submissions raised substantive arguments concerning the appropriate costs order and that it would be procedurally unfair for those submissions to be received without affording the Owner the opportunity to respond.
7. In light of those submissions, we issued further orders on 29 July 2025 as follows:

"The respondent may by 6 August 2025 file and serve upon the appellant submissions strictly in reply to the 'Appellant's Costs Submissions in Reply' filed by the appellant on 25 July 2025."

1. No submissions had been received by 2 September 2025. On 3 September 2025, at our direction, the Registry issued the following correspondence to the parties:

"We refer to the Appeal Panel's order of 29 July 2025, a copy of which is attached.

If further submissions were provided to the appellant by 6 August 2025, please provide a copy to the Appeal Panel by 4 September 2025."

1. No submissions were supplied.
2. Regarding the Builder's request for an extension of time, adherence to procedural timetables is a core obligation on all parties in the Tribunal under s 36(3) of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act). That provision imposes the duty on parties and legal practitioners to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal.
3. The same obligation applies in relation to the Owner's request to make further submissions where the orders did not so allow.
4. In this matter it has been appropriate to allow some flexibility in respect of both requests. In relation to the extension of time (in accordance with the principles in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22) the length of the delay was short, the reason for the delay was the unavailability of Counsel, the Builder had an arguable case regarding costs (although ultimately unsuccessful for the reasons set out below) and the Owner could suffer little to no prejudice if the Builder were permitted to lodge their reply submissions one week late. Accordingly we have allowed the extension of time and accepted the Builder's reply submissions.
5. Similarly, although our orders did not provide for a reply from the costs applicant, the Owner submitted that the Builder's submissions went beyond mere reply. In order to ensure procedural fairness and allow the Owner to respond to any issues not previously addressed, we have accepted the Owner's submissions in reply and given the Builder the opportunity to respond to those submissions. As noted, the Builder did not take that opportunity.

1. The Owner sought an order that the Builder pay the Owner's costs of the appeal as agreed or assessed on the ordinary (party/party) basis under s 60(4) of the NCAT Act.
2. The Owner referred to her submissions in chief in support of her appeal, dated 11 September 2024, where she had submitted in relation to the costs of the appeal:

"44. In the circumstances of this case, the owner submits that it would be appropriate for her to be awarded the costs of this appeal. The member reserved his decision for almost 12 months and then:

a. failed to consider or address the submissions of the owner in relation to the discontinuance of the bathroom and flooring tiles and their significance; and

b. erred in assessing the quantum of the work order."

1. In her submissions of 8 July 2025, the Owner contended that the appeal had turned on a discrete issue: whether the Tribunal failed to engage with the Owner's central submission that key materials used in the defective works could not be matched because they had been discontinued. This failure affected the proper assessment of compensatory damages and resulted in an order that failed to restore the Owner to the position she would have been in had the works been completed without defects. The Owner submitted that the obligation of a Tribunal to consider material submissions made by a party was well established. A failure to do so constituted a denial of procedural fairness and an error of law. This should have been obvious to the Builder.
2. The Appeal Panel ultimately accepted that the Tribunal's failure in this regard amounted to such an error. However, the Owner also submitted that the appeal involved some complexity and a novel issue that had previously not been the subject of any determination; that is, whether the scope of the renewal order was circumscribed by the work order and what, if any, was the impact of a discontinuance of materials since the work order. The Owner submitted that the appeal came down to a proper construction of cl 8 of Sch 4 to the NCAT Act.
3. The Owner submitted that these matters constituted special circumstances justifying a costs order in favour of the Owner in the appeal proceedings.
4. The Owner went on to note that the amount claimed or in dispute in respect of the proceedings was more than $30,000. Consequently r 38 and 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules) applied such that the Tribunal (and on appeal, the Appeal Panel) may award costs in the absence of special circumstances.
5. The Owner had been wholly successful in her appeal. The Builder had been placed on notice of the precise ground of appeal and had not made any offer to concede or narrow the issues in dispute; instead the Builder filed written submissions opposing the appeal and appeared by counsel at the hearing to contest the matter in full and so the Owner had been required to incur the costs of preparing written submissions, briefing counsel and attending a contested hearing.
6. The Owner submitted that she should be awarded costs in the appeal because:

(1) The Owner was wholly successful. The Appeal Panel allowed the appeal in full on the only ground advanced. No cross appeal or notice of contention was filed by the Builder and the primary order was set aside and the matter remitted to the Tribunal.

(2) The appeal was both necessary and reasonable in the circumstances. The primary decision contained a clear and material error, namely a failure by the Tribunal to engage with the critical submission made by the Owner concerning the unavailability of discontinued tiles and floor boards. That error had a direct bearing on the quantum of compensation awarded and warranted appellate correction.

(3) The grounds of appeal were squarely identified in the appeal application and substantiated by reference to the evidence before the Tribunal below. It was also clear that the Tribunal had not addressed the submissions of the Owner in relation to the discontinuance of the tiles and floor boards. Despite this, the Builder chose actively to oppose the appeal.

(4) The appeal involved legal and factual complexity as well as a novel point of law. The proceedings involved technical evidence regarding defective building works, the scope and impact of the original work order on the ambit of the renewal order, and principles of compensatory damages.

(5) Both parties were legally represented. Both parties engaged solicitors and counsel, and the appeal proceeded as a fully contested hearing. The Builder could not credibly claim surprise or prejudice regarding exposure to an adverse costs order.

(6) Fairness dictated an award of costs.

(1) that the costs of the appeal be costs in the cause; or, alternatively,

(2) that the Builder pay the Owner's costs of 29 October 2024 on the ordinary basis and there otherwise be no order as to costs; or, alternatively,

(3) that the Builder pay 30% of the Owner's costs of the appeal, on the ordinary basis.

1. The Builder contended that these orders were appropriate in circumstances where:

(1) The Owner did not clearly articulate questions of law in the Grounds of Appeal;

(2) The "central proposition" in the Owner's case that the Tribunal made a House v King error failed entirely;

(3) The Appeal Panel had to distil new questions of law at final hearing for the Owner;

(4) The Owner only succeeded with respect to the new grounds distilled by the Appeal Panel; and

(5) the Owner's success was significantly (if not entirely) moderated by the fact that the matter has been sent back for another hearing. The real issues giving rise to the appeal remain to be resolved.

1. The Builder acknowledged that s 60 NCAT Act did not apply in the current circumstances and the usual considerations as to costs were applicable.
2. In that regard, the Builder submitted that the manner in which the Owner conducted her case and the outcome obtained were germane:

(1) The Appeal Panel had pointed out that the Owner's grounds of appeal did not identify a question of law

(2) as questions of law need to be articulated with precision, it was reasonable for the Builder to oppose the appeal;

(3) the "central proposition" in the Owner's case that the Tribunal made a House v King error had failed;

(4) the Appeal Panel had to distil a question of law at the final hearing for the Owner, namely

(a) that the Owner had not been afforded procedural fairness by failing to respond to a substantial argument

(b) that the Tribunal did not apply the correct test in the assessment of damages

neither of which, the Builder submitted, were articulated clearly in the grounds of appeal;

(5) one of the questions of law that the Appeal Panel had to distil and upon which the Owner ultimately succeeded had only been raised by the Owner in submissions in reply when discussing an amended ground that was not pressed at final hearing;

(6) ground 4 of the amended grounds was ultimately not pressed by the Owner at the final hearing. This only occurred after the Builder had been put to considerable expense in responding to it.

1. The Builder further contended that the Owner's success was significantly moderated by the fact that the matter had been sent back for another hearing. The real issues giving rise to the appeal remained to be resolved. Having regard to the guiding principle in s 36 of the NCAT Act, a just resolution of the question of costs of the appeal should not require that one party pay the costs of the other in respect of the appeal.
2. The Builder submitted that, in light of the "unhelpful" manner in which the appeal was pursued by the Owner and the significant indulgences afforded to the Owner at the final hearing and that the real issues giving rise to the appeal remained to be resolved, the appropriate order be costs in the cause, or that the Builder should only pay the Owner's costs of 29 October 2024, as it was only at that point in time the questions of law were articulated with precision and that substantive arguments upon which the Owner ultimately succeeded were raised with clarity.
3. Alternatively, in the event the Appeal Panel was minded to award costs, whilst the Owner had succeeded on the grounds distilled by the Appeal Panel;

(1) the Owner failed on the central proposition to her case to which an extensive amount of time and cost were expended in written submissions, and

(2) The Owner abandoned ground 4 of the amended grounds after substantive costs had been incurred by the builder in replying to it,

"both being separate issues for the purposes of costs orders in accordance with the approach set out in Bostik Australia Pty Ltd v Liddiard (No 2)" ([2009] NSWCA 304 at [38] (Bostik)). The Builder submitted that a discount of 70% should be applied in view of the Owner's failure on the central proposition of her case.

1. Specifically in response to the Owner's costs application, the Builder contended that the Owner had failed to take into account the unorthodox manner in which the Owner obtained success. Whilst bringing the appeal might have been necessary, the manner in which it was brought put both parties to additional expense that could have been avoided at the outset, had the Owner clearly articulated a question of law.
2. Whilst the grounds of appeal were "squarely identified in the appeal application", the Appeal Panel found that they did not identify a question of law. There was nothing in the appeal that raised novel or legal complexity. The simple point that needed to be articulated and was not (until 'accidentally' expressed in submissions in reply to a ground not pressed) was a denial of procedural fairness by failing to respond to a substantial argument. Fairness in the circumstances of this case did not warrant an award of costs in favour of the Owner, given the unorthodox manner in which the appellant had obtained success.

1. In essence, the Owner submitted that costs should follow the event. The appeal was wholly successful on the sole ground identified by the Appeal Panel and was dispositive of the Tribunal's decision. It was immaterial that the Appeal Panel had described the ground on which she had been successful as having been distilled from the Owner's materials. The appeal was conducted properly, and the Owner's success was neither accidental nor partial.
2. The Builder's submission that a 70% discount should apply was wholly without merit. Although the Owner did not pursue all grounds to conclusion, the determinative ground was clearly advanced and success was achieved in full on that basis. The abandoned ground was not pressed at hearing and did not materially increase the duration or cost of the appeal, particularly as both parties had already prepared extensive submissions on all issues. In circumstances where the Builder contested the appeal and the Owner obtained the substantive relief sought, apportionment was neither justified nor fair. Bostik did not support apportionment where the successful party had obtained substantive relief and where the unsuccessful issues did not materially increase the costs burden, particularly where both parties were legally represented and prepared extensive original submissions as to the primary appeal point.
3. There was no basis to depart from the standard rule that costs follow the event.

(1) Should a hearing on costs be dispensed with in accordance with s 50(2) of the NCAT Act?

(2) Which legislative provisions apply to the costs application?

(3) What are the applicable principles in determining the costs application?

(4) Who is the successful party?

(5) Are there grounds to deny or reduce the costs payable to the successful party?

Should a hearing on costs be dispensed with in accordance with s 50(2) of the NCAT Act?

1. Under s 50(3) of the NCAT Act, the Tribunal may not make an order dispensing with a hearing unless the Tribunal has first afforded the parties an opportunity to make submissions about the proposed order and taken the submissions into account. This also applies to the Appeal Panel in relation to an appeal.
2. Order 4 of the orders in the principal decision required submissions to include whether the parties considered that the issue of costs could be determined on the papers. The Owner did not make submissions on the point. The Builder accepted that it was appropriate to dispense with a hearing.
3. The parties have been afforded an opportunity to make submissions. We are satisfied that the costs issues can be adequately determined in the absence of the parties by considering the written submissions and any accompanying documentation. Accordingly it is consistent with the Tribunal's guiding principle under s 36 of the NCAT Act to dispense with a hearing in relation to costs.

Which legislative provisions apply to the costs application?

1. Under ss 60(1) and 60(2) of the NCAT Act, the Tribunal may award costs in relation to an appeal only if it is satisfied that there are special circumstances warranting an award of costs, and otherwise each party to proceedings in the Tribunal is to pay the party's own costs.
2. By reason of the operation of s 35 of the NCAT Act, when read with par (a) of the definition of "procedural rules" and the definition of "Tribunal rules" in s 4(1) of the NCAT Act, s 60 is subject to the NCAT Rules.

38 Costs in Consumer and Commercial Division of the Tribunal

(1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal.

(2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if -

...

(b) the amount claimed or in dispute in the proceedings is more than $30,000.

1. Rule 38A of the NCAT Rules relevantly provides:

38A Costs in internal appeals

(1) This rule applies to an internal appeal ... if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of -

...

(c) the procedural rules.

...

(2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.

1. As the amount claimed or in dispute in the proceedings at first instance exceeded $30,000, the "first instance costs provisions" in respect of the appeal are those set out in r 38. Accordingly, by virtue of r 38A(2), we must apply r 38 in deciding whether to award costs in relation to the appeal.
2. In applying r 38(2)(b) in relation to the appeal, as required by r 38A, the "amount claimed or in dispute" is the amount in dispute on appeal, not the amount in dispute in the proceedings at first instance: Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [57].
3. As acknowledged by both parties, the amount claimed or in dispute in the appeal is more than $30,000. Accordingly, special circumstances are not necessary before we may make an order in relation to the costs of the appeal.

What are the applicable principles in determining the costs application?

1. In Vella v Mir (No 3) [2020] NSWCATAP 17 (Vella (No 3)) at [28]-[30] the Appeal Panel summarised the relevant principles on the Tribunal's (and, by extension, the Appeal Panel's) exercise of its discretion to award costs, as follows:

28. Clause 38 gives the Tribunal a wide discretion to make an order for costs. It does not specify the factors the Tribunal must take into account in exercising the discretion, although the discretion to make such an order must be exercised judicially: see, for example, Ruddock v Vadarlis [2001] FCA 1865 at [9].

29. Where an application has been heard and determined on the merits and Clause 38 applies, the appropriate starting point for the exercise of the discretion is not that the parties are to pay their own costs. Rather, it is the well-established position at common law; that is, that the purpose of making a costs order is to provide compensation to the party in whose favour the order is made for the expense the party has been put to in prosecuting or defending legal proceedings. In general terms, this means that a party who is successful is entitled to an order for costs in its favour, subject to exceptions generally involving misconduct on the part of that party: Latoudis v Casey [1990] HCA 59; [1990] 170 CLR 534; Oshlak v Richmond River Council [1998] HCA 11.

30. In BNT Constructions Pty Ltd v Allen [2017] NSWCATAP 186 the Appeal Panel, having set aside a costs order made in the Consumer and Commercial Division, decided to re-exercise the costs discretion. Clause 38 was the applicable costs provision in that case. At [67] the Appeal Panel noted the following principles relevant to the exercise of the discretion:

(1) the starting point is that a successful party should be entitled to an order for costs in his favour;

(2) an award of costs is by way of an indemnity and not as punishment;

(3) there is no absolute rule that, absent disentitling conduct, a successful party is to be compensated by the unsuccessful party;

(4) the factors to be considered are not to be confined as to do so would constrain the general discretion;

(5) the relative success of the parties on different issues and the time taken to determine them may be relevant;

(6) the nature of the proceedings is relevant;

(7) the proper exercise of the discretion requires a decision maker to do justice between the parties and to exercise the discretion having regard to relevant considerations and in a manner which is not arbitrary and capricious.

1. As rr 38 and 38A apply, in the usual course, costs would follow the event and an award of costs would be made in favour of the successful party.

1. In Thompson v Chapman [2016] NSWCATAP 6 the Appeal Panel stated, at [69]-[74]:

69 The starting point in exercising [the costs] discretion is that the "usual order for costs" is that a successful party should be entitled to an order for costs in their favour: see Latoudis v Casey [1990] HCA 59; [1990] 170 CLR 534 per Mason CJ at 554 and Oshlack v Richmond River Council per McHugh J at 97.

70 The reason for such an order is that it is appropriate for the party who incurred costs caused by the other party in litigation to be reimbursed. Further, an award of costs is by way of an indemnity to the successful party and not as punishment of the unsuccessful party: see Latoudis v Casey per Mason CJ at 543 and McHugh J at 567 and in Oshlack v Richmond River Council per Brennan CJ at 75.

71 Where there is a general discretion for costs there is no absolute rule that, absent disentitling conduct, a successful party is to be compensated by the unsuccessful party nor is there any rule that a successful party might not be ordered to bear the costs of an unsuccessful party: see Oshlack v Richmond River Council per Gaudron and Gummow JJ at 88 and Kirby J at 121 - 123.

72 The factors to be considered in awarding costs in a particular case are not to be confined as to do so would constrain the general discretion. However it is clear from the authorities that factors that might influence whether the usual order for costs should apply and, if so, to what extent include:

(1) Whether, by reason of the relative success of the parties on different issues and the time taken to determine those that an order for costs based on issues should be made: see for example Bostick Australia Pty Ltd v Liddiard (No 2) [2009] NSWSCA 304; and

(2) Whether, by reason of the nature of the proceedings the usual rule should otherwise be displaced in whole or in part: see Oshlack v Richmond River Council per Gaudron and Gummo JJ at 41 - 44.

1. The question to be asked in determining which was the successful party was considered by Ward J in Quest Rose Hill Pty Ltd v White [2010] NSWSC 1190 (at [67]), to include the question "Had the plaintiff won anything of value or anything he could not have won without fighting the action through to a finish?"
2. The Owner was successful in dislodging order 1 and having the matter remitted for reconsideration.

Are there grounds to deny or reduce the costs payable to the successful party?

1. The Builder has acknowledged that the appeal was allowed but contends that circumstances mitigate against the Owner being awarded the costs of the appeal in full.
2. The fact that the Owner's submissions on the House v King point were not the reason for the Owner's success on the appeal did not detract from the Owner's overall success. The substance of the grounds of appeal were sufficient to identify questions of law. As noted in the Owner's initial submissions dated 11 September 2024, the Tribunal had failed to consider or address the Owner's submissions in relation to the discontinuance of the bathroom and flooring tiles and their significance. This proposition underlay both bases on which the Tribunal's decision was overturned.
3. The Builder contended that the costs should be apportioned due to the Owner having failed on the submission founded upon the principles laid down in House v King.
4. In Access Training Group Ltd v Jane [2024] NSWCA 204 (Access), there were a number of issues in the proceedings on which there were varying degrees of success. The identification of the "event" for the application of the general rule that costs follow the event was complicated by the fact that there were two sets of proceedings (with different, though related, parties) and, at least on first blush, mixed success in both sets of proceedings_._ Ward P took the approach (at [182]-[199], Payne JA agreeing, at [201]) that where there are multiple "events" for the purposes of r 42.1 of the Uniform Civil Procedure Rule 2005 (NSW), the apportionment of costs across multiple issues can properly be done on an impressionistic basis. Ward P noted (at [190]-[191] and [198]):

190 ...a tension between the accepted general rule that a successful party should have the whole costs of the proceeding (including the costs of an issue on which it has failed) ... and the recognition that in an appropriate case a costs order may be formulated to reflect the degree of success on distinct issues...

191 ... Relevant circumstances in which apportionment across different issues have been said to include: where a successful party has, in respect of one or more issues, "unfairly, improperly, or unnecessarily increased the costs" ...; where the bulk of the time has been taken on an issue on which the unsuccessful party had succeeded ...; where a particular issue or group of issues is clearly dominant or separable ...

...

198 Without having the familiarity that the primary judge had as to the conduct of the trial (and without the benefit of submissions as to time spent on particular issues or the like) it is difficult to apportion costs across those separate "events". However, the authorities to which I have referred above make clear that the apportionment of costs across multiple issues can properly be done on an impressionistic basis

1. Given that some of the set-off claims failed in that case, Ward P found it was appropriate, on a broad-brush approach, to order that the cross-respondents pay 75% of the cross-appellant's costs of the primary proceedings.
2. In Oikos Constructions Pty Ltd t/as Lars Fischer Construction v Ostin & Anor (No 2) [2021] NSWCA 98 at [39]- [40] (Oikos), the Court of Appeal determined that the respondents should pay 50% of the appellant's costs of the proceedings below. White JA (Basten and MacFarlan JJA agreeing) set out his reasoning at [28]-[29]:

28 Once it is decided that an otherwise successful plaintiff has failed on a severable or dominant issue such that it is not appropriate that the plaintiff receive all of his or her costs, in deciding how the discretion as to costs should be exercised to achieve fairness ... the perspective of both parties should be considered. The respondents were successful at trial on the type 2 defect issue, but Oikos was successful on the type 1 defect issue that was substantially more complex, involved the giving of more evidence, and took longer to determine. On balance Oikos had more success than did the respondents. This should be reflected in the costs orders.

29 Where courts have taken an issue by issue approach to the making of costs orders, the orders have taken a variety of forms. Sometimes the failure of a successful party on one or more issues will lead to a reduction in the percentage of costs payable to that party. Sometimes failure on particular issues may result in there being no order as to costs of the proceedings, or may result in an order being made for the payment of the otherwise unsuccessful party's costs. Sometimes orders may be made for payment by both parties of a proportion of the other party's costs ...

1. The approach taken in Access and in Oikos (in relation to the costs of the proceedings at first instance) is particularly directed towards the circumstances in those cases, where there was mixed success. That approach does not suit the circumstances of these proceedings, where the Owner is the successful party and no disentitling behaviour on the part of the Owner has been established.
2. The Builder relied on Bostik in submitting that the central proposition in the Owner's case and Ground 4 of the Amended Grounds of Appeal should be considered to be severable. However, as noted by the Court in Bostik at [38]:

"Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported).

...

A separable issue can relate to 'any disputed question of fact or law' before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34]."

1. The Owner succeeded on the central issue in the appeal, that the Tribunal failed to take into account a central submission. While the appeal did not turn on the submissions relying upon House v King, issues raised in that regard were still relevant to the matters to be considered; in particular, what, in the [current] circumstances ... was the measure of compensation required to place the Owner in the position she would have been in, if the contract had been complied with? (see the principal judgment at [47]).
2. The Owner's submissions which did not prevail were not dominant or severable. We are not persuaded by the Builder's submissions that the costs award should be reduced, nor by its submissions arguing for the apportionment of costs. Ultimately, the Builder's central proposition appears to be that the Owner succeeded on a ground which she had either failed to raise herself or only raised by chance, or accident, and therefore does not deserve to have the full costs of the appeal.
3. As should be clear from the principal decision, we do not accept the Builder's proposition that the Owner failed to raise the critical ground or only raised it by accident. Even if that proposition were correct, that would not provide reason for the Builder to have opposed the appeal or justify denying the Owner her costs of the appeal. The Builder opposed the appeal, and it is appropriate that it should pay the Owner's costs.
4. As the Appeal Panel held in Martin & Sidgreaves v Big Country Developments Pty Limited [2023] NSWCATAP 77, at [35]:

"35 The principles in relation to the apportionment of a successful party's costs do not warrant the order for the Appellants' costs of the appeal to be dissected in the way suggested by the Respondent. Generally, a successful party's entitlement to the whole of the costs of the proceedings should not be discounted to allow for another party's success in a separate issue that played a very minor part in the proceedings as a whole_: Macourt v Clark (No 2)_ [2012] NSWCA 411 at [7]. In Hawkesbury District Health Service Ltd v Chaker (No 2) [2011] NSWCA 30 at [14], the Court of Appeal held that the severability of one issue on which the successful party failed is not, without more, sufficient to warrant departure from the general approach. The exercise of discretion will often depend upon matters of impression and evaluation: Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 at [11]."

1. We do not consider that the matters raised by the Builder warrant departure from the usual approach that costs should follow the event.
2. The Owner was the successful party in the appeal. The Owner is entitled to costs on the ordinary basis.

(1) A hearing on costs is dispensed with pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013.

(2) The Respondent is to pay the Appellant's costs of, or incidental to, the appeal on the ordinary basis with such costs, if not agreed, to be assessed in accordance with the Legal Profession Uniform Law Application Act 2014 (NSW).

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.