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[2025] NSWCATAP 281
General information, not legal advice.
NCAT Appeal Panel
2025-11-05
G Blake AM SC, Principal Member
Original judgment source is linked above.
The history of the proceedings in the Consumer and Commercial Division
"1 The application is dismissed.
2 On or before 22 April 2025, the applicant is to pay the respondent $56,875.15.
3 On or before 01 April 2025, the respondent is to provide to the applicant and the Tribunal a note setting out its calculation of the interest payable to 22 April 2025.
4 On or before 08 April 2025, the applicant is to provide to the respondent and the Tribunal a note setting out its calculation of the interest payable to 22 April 2025.
5 If necessary, 15 April 2025, the respondent may reply to the applicant's note of calculation by providing a further note to the applicant and the Tribunal."
(2) reasons relevantly including findings on the issues arising for determination:
"...
Issue 2: Was it a term of the Agreement that Tybray would level the entire subfloor?
...
126 Iteck submits that Tybray was required to level the sub-floor by reason of three matters.
• the terms of the Quote.
• pursuant to an implied term of the Agreement that the works be performed with reasonable care and skill.
• by reason of the incorporation of the requirements of the O&M Manual into the Agreement.
127 I have rejected each of these propositions, and find that none of them individually or all of them cumulatively lead me to find that Tybray was required to level the entire sub-floor. In addition, such a finding would be inconsistent with Mr Il Kim's oral evidence that he agreed that Tybray would "only [level] those uneven surfaces" to which he had marked out on the floor on 31 May 2023.
Issue 3: Was it a term of the Agreement that Tybray install the tiles in accordance with the O&M Manual?
128 No. As I have found that there was no contractual obligation on Tybray to install the tiles in accordance with the O&M Manual, and it follows that Tybray did not fail to install the tiles in accordance with the O&M Manual.
Issue 4: Has Tybray otherwise fail to provide the services contracted for in a proper and workmanlike manner?
...
133 The issue of complying with the O&M Manual/manufacturer's instructions has been dealt with above and has been rejected.
134 As to a lack of compliance on relevant Australian Standards, no mention was made of any Australian Standard by Mr Roberts in his report. On the contrary, as is explained in Mr Considine's report at [109], (and further explored in the "hot tub"), "subfloor levelness is not included in AS 1884:2021[1]", which is the Australian Standard for the installation of resilient flooring" - Resilient sheet and tiles - Installation practices.
135 It follows that I reject the claim the works were not undertaken in proper and workmanlike manner by reason of a lack of compliance with the relevant Australian Standard.
Issue 5: Did Tybray breach the Consumer Guarantees found in s 54 of the ACL?
...
147 I do not find that any of the matters raised by Iteck, either individually or cumulatively cause me to conclude Tybray has breached the consumer guarantee found in s 54 of the ACL, and I find that this is not the case.
Issue 6: Did Tybray breach the Consumer Guarantees found in ss 55 of the ACL?
...
152 I have already rejected there has any non-compliance with the O&M Manual or failure to comply with an Australian Standard.
153 As to the flooring having undulations, is lifting and is incomplete:
(1) I prefer the views of Mr Considine in relation to any undulations or lifting. He was questioned thoroughly by Iteck's counsel during the "hot tub" and see no reason not to accept his views;
(2) for the reasons given above I do not consider that the works are incomplete.
Accordingly, I do not find that any of the matters raised by Iteck, either individually or cumulatively cause me to conclude Tybray has breached the consumer guarantee found in s 55 of the ACL, and I find that this is not the case.
Issue 7: Did Tybray breach the Consumer Guarantees found in ss 56 of the ACL?
...
158 I do not find that any of the matters raised by Iteck, either individually or cumulatively cause me to conclude Tybray has breached the consumer guarantee found in s 56 of the ACL, and I find that this is not the case.
Issue 8: Has Tybray not completed the works such that it is not entitled to seek payment?
Issue 8: Is Tybray entitled to payment of the claimed $56,875.15 plus interest?
...
162 It follows that Iteck's "entire contract "argument fails and that there is no reason in law that excuses Iteck from paying Tybray the $56,875.15 which has been owed since 6 June 2023.
163 I will give leave to Tybray to provide an updated note of the interest due.
Conclusion
164 For the above reasons, Iteck's claim fails in its entirety, and is dismissed. Tybray claim for monies owed under Agreement succeeds.
..."
(1) a Notice of Appeal in which in which:
(a) in section 5A, it appealed against the 25 March 2025 decision;
(b) in section 5B, it set out its grounds of appeal:
(a) the respondent's expert found that there was no unevenness in the floor over 4mm;
(b) that there were no tiles that were lifting; and
(c) there were no undulations in the floor, where there was no evidence to support such findings.
2. In the alternative, the Tribunal erred in finding that:
(a) the respondent's expert found that there was no unevenness in the floor over 4mm;
(b) that there were no tiles that were lifting; and
(c) there were no undulations in the floor, where such findings were against the weight of evidence and may have caused the appellant to suffer a substantial miscarriage of justice.
3. The Tribunal erred in law in that there was a constructive failure to exercise jurisdiction in determining whether there was a breach of the consumer guarantees provided by ss 54, 55 and 56 of the Australian Consumer Law.
4. The Tribunal erred in law by failing to give proper reasons in determining that:
(a) the respondent did not fail to install the tiles in accordance with the O&M Manual; and
(b) there was no breach of the consumer guarantees provided by ss 54, 55 and 56 of the Australian Consumer Law.
5. The Tribunal failed to take into account relevant considerations in determining that:
(a) the respondent did not fail to install the tiles in accordance with the O&M Manual; and
(b) there was no breach of the consumer guarantees provided by ss 54, 55 and 56 of the Australian Consumer Law.
6. Paragraphs 165 to 169 of the Decision relate to the submission in relation to costs to be made by the parties. The Appellant says:
(a) The costs of the proceedings at first instance should be decided following the determination of this appeal by the Appeal Panel; or;
(b) The costs of the proceedings at first instance can be remitted back to the Tribunal following the determination of this appeal."
(c) in section 6B, it stated that it was asking for leave to appeal, and contended that the 25 March 2025 decision in relation to the appeal grounds:
(i) was against the weight of the evidence and involves a factual error unreasonably arrived at and clearly in error; and/or
(ii) was not fair and equitable.
(2) an Application for stay of original decision pending appeal in which it sought a stay of order 2 of the 25 March 2025 orders (the stay application).
10 On 7 May 2025, the Appeal Panel constituted by myself made procedural orders for the hearing of the appeal including by orders 1 and 2 that the parties have leave to be legally represented, by order 10 listing the appeal for hearing on 4 August 2025 at 10.15 AM in Sydney for a half day, and by orders 12 and 12A dismissing the stay application with costs against Iteck (the 7 May 2025 AP orders).
(1) whether a hearing of the Tybray costs application should be dispensed with;
(2) whether a costs order should be made in favour of Tybray.
Whether a hearing of the Tybray costs application should be dispensed with
Whether a costs order should be made in favour of Tybray
"Legal Principles
[52] The Court has the power to order costs under s 98 of the Civil Procedure Act 2005 (NSW). A successful party may have a "reasonable expectation" of being awarded costs (Oshlack v Richmond River Council (1998) 193 CLR 72; (1998) 152 ALR 83; [1998] HCA 11 at [22], [134]). Costs generally follow the event: UCPR Pt 42 r 42.1.
[53] However, the position is different where there has been no hearing and, therefore, no "event". Where there has been no hearing, so that the Court has not determined the merits, there may not be a party who has clearly won. The principles to be applied in such a case were set out by McHugh J in Lai Qin at pages 624-625 (citations omitted):
"In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.
In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. ...
Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. ... But such cases are likely to be rare.
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings."
[54] Davies AJA, with whom Mason P and Meagher JA agreed, said in Edwards Madigan Torzillo Briggs Pty Ltd v Gloria Stack [2003] NSWCA 302 that:
"[5] When proceedings are brought to an end without a determination after a trial, the judge may find it difficult, even impossible, to make an award of costs. If the judge does make an award, it will generally be because the judge is satisfied that one party has had a substantial victory and the other a substantial loss, or that there has been a marked difference in the reasonableness of the actions taken by the parties, so that one party should be rewarded for its reasonable actions and the other party should suffer a detriment in costs."
[55] This was quoted with approval by Payne JA in Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681; [2018] NSWCA 84 at [27]- [30]. In Nichols, the correct approach for considering unreasonable actions by a party was set out by Basten JA at [8]-[10]:
"[8] Secondly, although it is possible to make an order for costs against one party if it can be shown that it has invited the litigation by its unreasonable behaviour, or has unreasonably pursued the litigation, such an order should only be made where that judgment is manifest by reference to known circumstances, not in dispute between the parties. If the question cannot be answered without reviewing large swathes of evidence and resolving, on a tentative basis, disputed questions of fact, the task should not be embarked upon.
[9] ...Further, once there is a real dispute as to a significant fact in issue in the proceedings, it is inappropriate to determine that matter, other than in making an interlocutory ruling, by accepting one party's case without permitting the other party an opportunity to challenge the opposing party's witnesses.
[10] Once it becomes apparent that such a course is required, the hypothesis on which the examination was undertaken is negated and the inquiry should stop."
[56] For determining whether one party has capitulated for the purposes of determining costs, Burchett J in ONE.TEL v Deputy Commissioner of Taxation (2000) 101 FCR 548; [2000] FCA 270 at [6] said:
"[6] In my opinion, it is important to draw a distinction between cases in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event or settlement so removes or modifies the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for an exercise of the Court's discretion otherwise than by an award of costs to the successful party. It is the latter type of case which more often creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs."
...
[58] In Xero Linear Lighting Systems NSW Pty Ltd v Benson [2024] NSWSC 916 at [82] and [108] I considered the policy reasons underlying these principles:
"[82] The approach to the question of costs which is derived from Lai Qin is both fortified, and independently required, by the Court's obligation to exercise its discretion in accordance with the overriding purpose. It is completely antithetical to the overriding purpose to allow arguments over costs to become substantial satellite hearings which require the Court to traverse contested matters that have otherwise been resolved by settlement...
[108] First, in general, to displace the outcome of there being no order as to costs the issues of unreasonable conduct or capitulation need to be demonstrable clearly and concisely by reference to uncontroversial facts. If complex submissions and large amounts of evidence are required, these are likely to be signs that the Court is being invited to descend into disputed facts and subjective analyses of parties' positions over the course of the litigation which Lai Qin and the overriding purpose in the CPA make clear the Court should not embark upon.
[109] Second, when negotiating a settlement parties will often be well advised to consider whether they should factor in their respective expended legal costs at an early stage of their settlement calculus as something they are likely to have to bear, rather than leaving the question of costs until after all other issues have been agreed."
Consideration
[59] As the principles I have set out above make clear, the starting point for making an order as to costs where there has not been a final hearing is that the parties should bear their own costs. While the exercise of discretion will turn on the facts of each case, in general to make a costs order against one of the parties in these circumstances, the Court must be satisfied of one of the following on clear and uncontested evidence:
(1) One party behaved so unreasonably in commencing or defending proceedings; or
(2) One party was almost certain to succeed on the interconvertible facts, which may be evidenced by the other party capitulating."
(1) the present case is the clearest of circumstances which constitute a capitulation. lteck having commenced the appeal (and put it to the costs of considering the appeal and appearing at directions hearing before the Appeal Panel) surrenders and withdraws. There is no supervening event or settlement that removes or modifies the subject of the dispute;
(2) Iteck has put it to the costs of preparing written costs submissions in respect of an application to be excused from paying costs - which is manifestly hopeless. It should also have its costs of preparing these costs submissions which it otherwise would not have done if Iteck simply agreed to paying Tybray's costs in respect of the appeal proceedings;
(3) it seeks:
(a) an order that Iteck pay its costs in respect of the appeal proceedings; and
(b) an order that lteck pay its costs in respect of its application for costs in respect of the appeal proceedings.
(1) the only steps taken by Tybray's solicitors prior to the dismissal of the appeal on 18 July 2025, other than in connection with the stay application, was sending six emails and receiving four emails;
(2) withdrawal without an explanation is not the only factor to be considered in establishing whether it capitulated and is not determinative on its own;
(3) there is no evidence before the Appeal Panel to suggest that the appeal and the withdrawal were a tactical decision by it;
(4) each party should pay its own costs of the appeal.
(1) A hearing of the costs application of the respondent is dispensed with.
(2) The costs application of the respondent is dismissed.
(3) Each of the appellant and the respondent is to pay their costs of the appeal other than the costs of the stay application pursuant to order 12A made on 7 May 2025.
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.
Iteck Communication Pty Ltd
Tybray Pty Ltd [2025] NSWCATAP 281;
(1997) 186 CLR 622
(2000) 101 FCR 548
(1998) 193 CLR 72
(1998) 152 ALR 83
(2018) 97 NSWLR 681