This decision relates to an application for costs made by the builder pursuant to a decision of the Appeal Panel in Hope v Hutchings; Hutchings v Hope [2021] NSWCATAP 19.
The substantive Appeal Panel proceedings involved a decision of the Tribunal in relation to a dispute under the Home Building Act 1989 (NSW).
Relevantly, the matter before the Tribunal was a re-hearing of claims following an order remitting the matter by the Appeal Panel in an earlier appeal Hutchings v Hope [2019] NSWCATAP 59 (AP18/50980).
In the remitted decision the Tribunal found that the builder's application was outside the period of three years after the date on which the contract was entered into as required by section 48K(8) of the Home Building Act 1989 (NSW) (HBA). Consequently, the Tribunal determined that it did not have jurisdiction to deal with the claim and dismissed the proceedings. The builder both appealed on errors of law and sought leave to appeal; the appeal was unsuccessful and dismissed.
The homeowners also appealed on the basis of an error of law and sought leave to appeal in relation to a finding made by the Tribunal about a "sham contract". The homeowners' appeal was also unsuccessful and was dismissed.
On dismissing the respective appeals we provided a timetable for the filing and serving of submissions, and for submissions to deal with whether or not the party consented to the issue of costs being determined on the papers.
We also proposed a preliminary view as to costs as follows:
At the conclusion of the hearing, we indicated we would call for further submissions on cost if either party seeks to make a costs application. Each party has failed in its appeal and on that's basis our preliminary view is that each party should pay their own costs. However, if either party seeks to make a costs application, then directions to facilitate the costs application have been made as part of the orders.
Parties were given until 12 February 2021 to make any submissions or application in relation to costs. The Appeal Panel received submissions from the builder on 12 February 2021 indicating that while he agreed that each party should pay their own costs in these appeals, he sought to have the Appeal Panel discharge the order in relation to the previous Appeal Panel's costs order in AP18/50980. No further submissions or application came from the homeowners in relation to the costs before 12 February 2021.
On 16 February 2021, we sought further submissions from the parties addressing the application to effectively set aside a costs order of a previous Appeal Panel in relation to a separate appeal.
The Appeal Panel received further submissions from the builder on 22 February 2021 and from the homeowner on 3 March 2021. We have read and considered those submissions.
The homeowner consented to the issue of costs being decided on the papers. While no submissions on the issue were made by the builder, we are satisfied that the issue of costs can be adequately determined in the absence of the parties by considering their written submission and that the parties would be put to further unnecessary costs if they were to attend the hearing in person.
[2]
Costs of the Appeal
Section 60 (1) of the Civil and Administrative Tribunal Act 2013 (NCAT Act), requires that each party bear their own costs. However, pursuant to s 60 (2) of the NCAT Act, a costs order can be made if "special circumstances" are established.
Rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules) states that despite section 60 of the Act, the Tribunal may award costs in proceedings in the absence of special circumstances warranting such an award if the amount claimed or in dispute in the proceedings is more than $30,000. The amount in dispute in these appeals was more than $30,000. Rule 38 and 38A of the NCAT Rules apply to this costs application and that does not appear to be disputed by the parties.
[3]
Consideration
The builder submits that consistent with the Appeal Panel's preliminary view, each party should pay their own costs in relation to the appeals we decided, that is appeal AP 20/03657 and cross appeal AP 20/05850. The builder submits however that the Appeal Panel's view cannot be given effect unless the costs order of 20 March 2019, made in relation to the previous appeal matter AP18/50980 is discharged or permanently stayed. In those proceedings the Tribunal set aside previous orders and remitted the appeal to be determined by a differently constituted Tribunal. That Appeal Panel also made a costs order at [5] requiring the builder to pay the homeowners the costs of the appeal as agreed or assessed on the ordinary basis.
The builder submits that there is no issue in relation to the Appeal Panel's jurisdiction to deal with AP18/50980 as this Appeal Panel accepted jurisdiction to deal with the matter, heard and determined the matter this far and made directions to facilitate the costs application. The builder submits that it remains incumbent on the Appeal Panel to deal with the matter pursuant to s81 of the NCAT Act.
The builder also relies on a notation made by the Appeal Panel on 5 July 2019 in the current proceedings and claims that it inherently establishes that the Tribunal meant to deal with the costs order in AP18/50980:
2. The Tribunal notes the Homeowners undertaking not to seek enforcement of any amount awarded in the Costs Assessment Application No. CA20 19/163033 until the Tribunal has completed the rehearing of matter numbers HB19/14573 and HB19/14574 and the question as to the costs of the proceedings at first instance and the rehearing has been determined.
In AP18/50980, that Appeal Panel also made an order at [4] that:
(4) All costs of the proceedings at first instance are reserved to the Tribunal to determine on remittal.
The builder submits that in accordance with the general procedure of the Tribunal contained at s38 of the NCAT Act that we should consider that order and the following matters and exercise discretion in favour of the builder to set aside or permanently stay order 5 in AP18/50980.
1. The builder was initially successful in the Tribunal, leaving the question of costs to be addressed;
2. Before costs could be considered in relation to the builder's claim in the Tribunal, the matter was overtaken by the first Appeal proceedings AP18/50980;
3. The first Appeal Panel in AP18/50980 determined that the Tribunal had not provided adequate reasons for the decision that the builder be paid $ 120,145.14 by the homeowner and remitted the matter for rehearing;
4. The Appeal Panel in AP18/50980 without hearing the parties on the question of costs ordered that the builder pay the homeowners' costs of Appeal, but otherwise reserved costs of proceedings at first instance for determination by the Tribunal on remittal.
5. An application for stay of the costs order in AP18/50980 was filed in the Appeal Panel and on 5 July 2019 the application for a stay was resolved by consent with the application for the stay dismissed and a notation of the homeowners undertaking not to enforce the costs order.
6. On remittal from AP18/50980 the Tribunal found it did not have jurisdiction to determine the builder's claim given the authority of the High Court's decision in Mann v Paterson Constructions Ply Ltd (2019] HCA 32 but otherwise did not deal with the issue of costs.
7. The builder built the home without receiving any remuneration for his labour. That home has now been sold for a price of $780,000.00. To have the builder pay other than his own costs would be to perpetuate a substantial injustice in the circumstances.
We are not of the view that we should make any order for costs or stay or set aside the previous costs decision of the Appeal Panel in AP18/50980.
Section 32 of the NCAT Act deals with the internal appeal jurisdiction of the Tribunal and relevantly provides:
….
(3) However, the internal appeal jurisdiction of the Tribunal does not extend to--
(a) any decision of an Appeal Panel, or
….
We are satisfied on that basis alone that we would not have the jurisdiction to deal with the decision of the earlier appeal panel in the first appeal. The jurisdiction of this appeal panel does not extend to a decision of another appeal panel.
Further, s 81 of the NCAT Act, which the builder refers to as empowering this appeal panel to stay or set aside the decision, relevantly provides:
(1) In determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following -
(a) the appeal to be allowed or dismissed,
(b) the decision under appeal to be confirmed, affirmed or varied,
(c) the decision under appeal to be quashed or set aside,
(d) the decision under appeal to be quashed or set aside and for another decision to be substituted for it,
(e) the whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel.
(2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when confirming, affirming or varying, or making a decision in substitution for, the decision under appeal and may exercise such functions on grounds other than those relied upon at first instance.
In effect the builder submits that s81(1) (e) of the NCAT Act can be read widely enough for this Appeal Panel to make orders which would affect another appeal decision previously made. We do not agree with that reading of the provision. Section 81(1) (e) relates to the case to be reconsidered by the Tribunal, not the Appeal Panel. Subsection (1) clearly relates to the order making powers the Appeal Panel has in determining an internal appeal and paragraph (1)(e) empowers the Appeal Panel to remit matters to be reconsidered by the Tribunal and make directions in that regard, not to alter the decision of another Appeal Panel in a separate appeal.
The power to make a stay is found in s 43 of the NCAT Act and relevantly provides that:
….
(3) The Tribunal may make such orders (whether with or without conditions) staying or otherwise affecting the operation of a decision to which a pending general application or appeal relates as it considers appropriate to secure the effectiveness of the determination of the application or appeal.
In the present case there is no pending general application or appeal, and the appeal has been determined.
The builder has also referred to s 38 of the NCAT Act as conferring a power for this Appeal Panel to effectively overturn a costs order in a separate and earlier appeal. Section 38 deals with matters of procedure. It does not confer a power to overturn substantive decisions.
In any event, even if we had such power, the reasons advanced by the builder as to why this Appeal Panel should set aside or permanently stay the costs order made by the Appeal Panel in matter AP18/50980 are not in our view persuasive. In their reasons the Appeal Panel in matter AP18/50980, constituted by the President Armstrong J and Principal Member Harrowell (as he was at the time) stated in their reasons at [65] why they were allowing costs of the appeal.
In respect of costs of the appeal, this is a matter to which r 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) applies. This is because r 38A requires that r 38 be applied in determining costs of the appeal. The amount claimed or in dispute in the appeal is greater than $30,000.00: The Owners Corporation Strata Plan No. 63341 v Malachite Holdings Pty Ltd [2018] NSWCATAP 256. Consequently there is a general discretion to award costs: see eg Thompson v Chapman [2016] NSWCATAP 6 at [68] and following. As the appellants have been successful, costs should follow the event and an order should be made in favour of the appellants in relation to this appeal.
There was no appeal from that decision and it is not contended that the substantive decision of the Appeal Panel was incorrect or that the discretion to award costs in any way miscarried. The homeowner had unequivocal success in the first appeal. The builder did not have to contest that appeal. Moreover, while the Tribunal had initially made an award in favour of the builder in the amount of $120,145.14, that decision was not upheld, and the matters were remitted for redetermination. As it has unfolded, the builder remained unsuccessful when the matter was remitted and no award of monies was made to him by the Tribunal; he was also unsuccessful in the appeal before this Appeal Panel.
For completeness, in matter AP18/50980 the Appeal Panel reserved all costs of the proceedings at first instance to the Tribunal to determine on remittal. In the reasons for decision on the remitted decision the Tribunal stated the following at para [293] to [295]:
293 As neither party has succeeded in their application I do not propose to make an order for costs in respect of the rehearing.
294 I note that the Appeal Panel reserved the costs of the original hearing for consideration by the Tribunal on the rehearing. I see no reason why a different order in respect of costs should be made in respect of the original hearing. The ultimate outcome of the two sets of proceedings should also govern the costs of the original hearing.
295 However I will give the parties leave to file submissions on costs should either party seek an order for costs either of the rehearing or of the original hearing or both. Such submissions should address the question whether the issue of costs can be resolved on the papers without a formal further hearing.
Presumably, in remitting the costs decision to the Tribunal, the Appeal Panel was of the view that the result may be dependent on the outcome of the remitted matter. If the builder had been again successful in obtaining an award of monies it may have been that the costs decision may have been different. However, as it transpired, both parties were unsuccessful in their application and the matters were dismissed by the Tribunal. There is no evidence before us that the parties made submissions to the Tribunal on costs consistent with the reasons in [295] or directions made by the Tribunal at orders 3-6. On that basis it remains that the Tribunal's decision was that it did not propose to make an award of costs and we find no grounds to make any further orders on costs in that regard.
Further, we reject the builder's submissions that this Appeal Panel should draw an inference regarding the notation made by the Appeal Panel on 5 July 2019 in matter AP18/50980. That was no more than a notation made by the Appeal Panel giving effect to an agreement between the parties pending the completion of the rehearing of the remitted matters HB19/14573 and HB19/14574, and the question as to the costs of the proceedings at first instance and the rehearing has been determined. That was neither an order nor a stay and we find there is no inference to be drawn from the notation which would support the proposition that we either have the power or that we should set aside the costs order of the Appeal Panel in matter AP18/50980.
In relation to the appeals we have dealt with, AP 20/03657 and 20/05850, we expressed a preliminary view that given both appeals were dismissed and both parties were unsuccessful that we should not make a costs order in either party's favour. We gave both parties the opportunity to make submissions as to whether they were seeking a costs order. The builder's submissions only related to setting aside or staying the costs order in matter AP18/50980 and we have declined to do so. Otherwise neither party made submissions that we should make an award of costs and on that basis we will dismiss the builder's application in relation to costs and make an order that each party bear its own costs.
[4]
ORDERS
The Tribunal makes the following orders:
1. An oral hearing on the issue of costs is dispensed with under s 50 (2) of the Civil and Administrative Tribunal Act 2013 (NSW).
2. The application for costs and other orders are dismissed.
3. Each party is to bear their own costs of the appeal in accordance with s 60 (1) of the Civil and Administrative Tribunal Act 2013 (NSW).
[5]
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
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Decision last updated: 22 March 2021