K & K Ventures Pty Ltd v Attar

Principles relevant to the exercise of the discretion to award costs

1. The nature of the general discretion to award cost under r. 38(2) was considered by the Appeal Panel in Bonita v Shen [2016] NSWCATAP 159: 58. Rule 38 (2)(b) of the NCAT Rules provides that the Tribunal "may" award costs. This provision confers upon the Tribunal a power which may be exercised at the discretion of the Tribunal: see s9 of the Interpretation Act. 59. In Thompson v Chapman [2016] NSCATAP 6, when dealing with r 38(2)(b), the Appeal Panel said at [69]: The starting point in exercising such a discretion is that the "usual order for costs" is that a successful party should be entitled to an order for costs in their favour. 59. The Appeal Panel in Thompson referred to the decisions of the High Court in Latoudis v Casey (1990) 170 CLR 534 and Oshlack v Richmond River Council (1998) 193 CLR 72. 60. In Latoudis McHugh J said at 567: An order for costs indemnifies the successful party in litigious proceedings in respect of liability for professional fees and out-of-pocket expenses reasonably incurred in connection with the litigation: Kelly v. Noumenon Pty Ltd (1988) 47 SASR 182, at p 184. The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory. Thus, in civil proceedings an order may, and usually will, be made even though the unsuccessful party has nearly succeeded or has acted reasonably in commencing the proceedings. 61. In Oshlack McHugh J said at 97: 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[96]. 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. 62. While McHugh J was in the minority in Oshlack, (which related to an individual seeking to remedy or restrain a breach of the Environmental Planning and Assessment Act, 1979 (NSW), being proceedings authorised by s 123 (1) of that Act), the majority in that case did not disagree with the general principle but rather whether, in the particular circumstances of the case, an order for costs should be made against the unsuccessful plaintiff, Oshlack. 63. On the other hand, where there is a general discretion to award costs there is no absolute rule that the successful party must receive the costs. In Thompson the Appeal Panel said at [71]-[72]: 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 be of the costs of an unsuccessful party: see Oshlack … 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 (N0 2) [2009] NSWCA 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 … per Gaudron and Gummow JJ at 41-44.
2. See also Islam v Metricon Homes Pty Ltd [2018] NSWCATAP 116 at [32-39].

K & K Venture's submissions

1. In short, K & K Ventures argue that their costs from the time Mr Attar commenced proceedings in the CCD, until he conceded the appeal, should be allowed. Mr Attar consistently maintained that the Tribunal had jurisdiction to hear his claim under the HB Act. This was so despite K & K Ventures writing to him advising that it did not believe that there was jurisdiction under the HB Act. K & K Ventures notes that the issue of jurisdiction was raised by Senior Member Wilson and that the parties expressly joined issue on whether or not there was jurisdiction under the HB Act in their points of claim and points of defence. K & K says Mr Attar should pay their costs from the time he filed the points of claim on 29 May 2018.
2. K & K Ventures' solicitors wrote to Mr Attar on 10 August 2018 and 8 October 2018 warning him that his claim was not one under the HB Act and of the costs consequences, if his claim was dismissed, as a result.
3. The jurisdictional issue was listed for hearing before the Tribunal on 15 November 2018 when Mr Attar was successful. K & K Ventures then appealed that decision.
4. At the appeal hearing on 11 March 2019, where K & K Ventures maintained its position that there was no jurisdiction under the HB Act, Mr Attar consented to the appeal being allowed. He agreed to file amended points of claim for a reduced amount under the Australian Consumer Law. K & K Ventures describe this as a complete capitulation by Mr Attar.
5. K & K Ventures relied on the decision of the Western Australian Court of Appeal in Watts -v- RHG Mortgage Corporation Ltd [No 2] [2016] WASCA 17, where the Court said at [7]: It is trite law that while the exercise of the discretion as to costs must be exercised judicially the discretion is otherwise unfettered. Similarly, it is trite law that ordinarily the successful party is entitled to an order for costs. While there has been no determination on the merits in this case, the appeal was allowed by consent in circumstances amounting to a capitulation by the respondent. We did not understand the respondent to press any other view.

Mr Attar's submissions

1. In submissions Mr Attar points out that he was successful on the jurisdictional issue at first instance. He denies that he capitulated before the Appeal Panel.
2. He notes that there was no application for costs below, and that in similar circumstances in Mrjana v Imagine Education Australia Pty Ltd [2016] NSWCATAP 232 the Appeal Panel had declined to go into whether special circumstances justifying a costs order had existed at first instance as no application for costs had been made. In our view that decision is of no assistance in the present circumstances, as: 1. this is not a case where special circumstances must be found to for a costs order to be made: and, 2. K & K Ventures were not in a position to seek costs below as the Tribunal had decided against it on the issue of jurisdiction. While Mr Attar is right when he says that there has never been a decision on the merits, the point of dispute, to date, has been jurisdiction.
3. Mr Attar argues that being put on notice that K & K Ventures would seek costs if it was ultimately successful on the issue of jurisdiction, does not mean that K & K Ventures is entitled to costs.

Consideration

1. We do not see a way of characterising Mr Attar's consent to K & K Venture's appeal being allowed, other than as complete capitulation on his part. Mr Attar consented to the appeal against the finding that there was jurisdiction under the HB Act being allowed, and to his claim being sent back to start again under the Australian Consumer Law. Given that the issue agitated between the parties until that time was the issue of jurisdiction this represents a complete capitulation.
2. As the provisions of r. 38 applied, both at first instance and on appeal, we see no basis on the material before us for not making the usual orders as to costs.
3. With respect to the appeal, Mr Attar should pay the K & K Venture's costs of the appeal.
4. With respect to the proceedings below, we agree that that Mr Attar should pay the costs of the proceedings from 29 May 2018, when he filed his points of claim asserting a claim under the HB Act, despite being alerted to the fact that there was a real dispute about jurisdiction. While he was not formally legally represented at the time, he did have access to informal legal advice. He chose to pursue his claim under the HB Act, knowing that jurisdiction was in dispute, and that he risked having his claim dismissed if there was no jurisdiction, with likely cost consequences.

Orders

1. The Appeal Panel makes the following orders: 1. A hearing on costs is dispensed with in accordance with s 50(2) of the Civil and Administrative Tribunal Act 2013. 2. The Respondent is to pay the Appellant's costs of the appeal, including the submissions on costs, as agreed or assessed, within 28 days of the date of agreement or assessment. 3. The Respondent is to pay the Appellant's costs of proceedings HB 18/13908 from 29 May 2018 onwards, as agreed or assessed, within 28 days of the date of agreement or assessment.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar 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: 18 July 2019