This is an application for costs by the successful respondent (homeowner) to an appeal brought by the appellant (builder).
The parties have provided concise written submissions on the respondent's application for costs.
Both parties were given the opportunity to address in those submissions whether a further oral hearing was sought regarding the costs application and neither party sought an oral hearing.
In our opinion the issues for determination can be adequately determined in the absence of the parties by considering the written submissions provided and we therefore dispense with an oral hearing.
We have read and considered the submissions of both parties on the issue of costs.
[2]
Background
The issues between the parties on the appeal are adequately explained in our reasons for decision - Javam v Islam [2020] NSWCATAP 72. In short, the appellant had been ordered by the Tribunal at first instance to pay the respondent's costs of those proceedings. The appellant appealed from that order but the appeal was dismissed.
The respondent now seeks an order that the appellant pay the respondent's costs of the appeal. The respondent submits that costs should follow the event.
Both parties accept that r 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) (the "NCAT Rules") applies to the appeal.
Both parties accept that r 38 of the NCAT Rules applied to the proceedings at first instance.
The relevant amount to consider in relation to this application is the amount in dispute on the appeal - Allen v Tricare (Hastings) Ltd [2017] NSWCATAP 25 at [57]. The respondent submits that the "amount claimed or in dispute" on the appeal is greater than $30,000 and so r 38(2)(b) applies with the effect that ordinary general law principles apply to the question of costs.
The appellant's position is encapsulated in the following written submission made by him:
"If the Builder was successful, there would be no order as to costs. Accordingly, the only amounts in dispute are the Owner's Costs.
As the Builder has previously paid the Owner $4,000 for costs in the Local Court, and the Supreme Court has made orders that each party bear their own costs, it is submitted that the ordinary costs of the Owner awarded by the Tribunal would amount to less than $30,000.
Where the costs incurred by the Owner's are less than $30,000, each party is to pay their own costs unless there are special circumstances warranting an award of costs."
We do not agree with the appellant's first submission, namely that had he been successful there would have been no order as to costs.
The relevant question, in this case, is what was the amount "claimed or in dispute" on the appeal.
The respondent claims that his costs, recoverable pursuant to the costs order of the Tribunal below, are greater than $30,000. Thus, had the appellant been successful on the appeal, he would prima facie have been entitled to his costs relying upon rr 38 and 38A. That is because the amount claimed by the respondent was over $30,0000, and that claim had been defeated. Put another way, the appellant confuses the amount claimed or in dispute with the amount ordered to be paid. It is the former which is relevant to rr 38 and 38A, not the latter.
As for the second submission, it may be the case that ultimately the amount for which the appellant is liable pursuant to the costs order is less than $30,000 because of an agreement which may be reached between the parties, or because the costs are assessed and an amount of less than $30,000 is assessed as being recoverable or perhaps for another reason.
But, as we have already said, the issue in relation to rr 38 and 38A is not what amount the appellant is ultimately liable for, but what is "the amount claimed … in the proceedings" - see Allen at [43].
Accordingly, we find that the amount claimed or in dispute is more than $30,000 and so ordinary general law principles apply to the question of costs.
The respondent submits that it was successful on the appeal and therefore costs should follow the event in accordance with those general law principles - see, for example, Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 and well-known passages from the judgments of McHugh J at [67] and Kirby P at [134] to the effect that the costs should usually follow the event i.e. a successful party ought ordinarily be awarded costs.
In answer to these general law principles the appellant submits:
"Further and in the alternative where the it is (sic) found that the amounts in dispute are over $30,000 (which is denied), it is submitted that the Builder should not be penalised for the appeal having taken steps to challenge a decision where the amount awarded was less than $30,000, being no more than the parliaments intended limit.
Accordingly, the Builder submits that there should be no order as to costs."
In relation to those submissions, we firstly observe that costs orders are not made by way of penalty, but rather as compensation. As McHugh J said in Oshlack at [67]:
"The expression the 'usual order as to costs' embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation."
The appellant next submits that he was challenging a decision where the amount awarded was less than $30,000, being no more than parliament's intended limit.
Two things may be said about this submission.
First, it is incorrect in that it focuses on the amount in dispute in the original proceedings. The relevant amount in dispute is the amount in dispute on the appeal, together with the associated costs and considerations relevant to conducting a contested appeal.
Secondly, the circumstances where costs do not follow the event are limited. In Oshlack McHugh J said at [69]-[70]:
"[69] The traditional exceptions to the usual order as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion. In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd, Devlin J formulated the relevant principle as follows:
'No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct.'
'Misconduct' in this context means misconduct relating to the litigation, or the circumstances leading up to the litigation. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute.
[70] Apart from anomalous examples in the equity jurisdiction, there are very few, if any, exceptions to the usual order as to costs outside the area of disentitling conduct. The court may award costs in favour of a defendant where the plaintiff has obtained only nominal damages. However, this practice can be justified on the basis that, in reality, the successful party lost the litigation and the unsuccessful party won…."
There is no submission that the respondent was guilty of any disentitling conduct, and, even if it were relevant, we do not find that the amount awarded in the principal proceedings, being an amount of $20,000, was by way of nominal damages, especially when the history relating to that $20,000 is taken into account (that history is set out in our principal decision).
No other submissions were made by the appellant in opposition to an order for costs.
In our opinion the appellant should be ordered to pay the respondent's costs of the appeal, including the costs of this application. There is no warrant for making an order other than that costs should follow the event.
[3]
Conclusion
We make the following orders:
1. An oral hearing on costs is dispensed with under s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW).
2. The appellant is to pay the respondent's costs of the appeal as agreed or assessed in accordance with s 60(4)(b) of the Civil and Administrative Tribunal Act 2013 (NSW).
[4]
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: 10 July 2020