Kapeller v BH Australia Constructions Pty Ltd

NCAT Appeal Panel|2019-01-21

Background

This decision concerns an application by the appellants (the homeowners) for an order that the respondent (the builder (BH Constructions)) pay the homeowners' costs of the appeal.
This application for costs follows the publication by this Appeal Panel of its decision that the homeowners' appeal be upheld and that the proceedings at first instance be remitted to the Consumer and Commercial Division for redetermination: see Kapeller v BH Australia Constructions Pty Ltd [2019] NSWCATAP 40.
The application at first instance had been brought by the homeowners in which they sought damages from BH Constructions for an amount in excess of $30,000.00. The decision at first instance resulted in an order that the homeowners' application be dismissed. However, on appeal, this Appeal Panel set aside that order and ordered the homeowners' application (and the cross application brought by BH Constructions) to be re-determined.

Submissions of the homeowners

The homeowners submitted that there are two grounds for the award of costs. The first is by the application of rr 38 and 38 A of the Civil and Administrative Tribunal Rules 2014 (the Rules). The second ground is that, in the event that the Appeal Panel were to decide that r 38 and 38 A do not apply, then the homeowners submit that "special circumstances" exist and they seek to invoke the provisions of s 60 of the Civil and Administrative Tribunal Act 2013 (NCAT Act). The effect of s 60(2) is that the Tribunal may award costs in relation to proceedings only if it is satisfied that there are special circumstances warranting an award of costs. That provision is subject to rr 38 and 38 A (see s 35 of the NCAT Act).

Submissions of BH Constructions

BH Constructions submitted that an order concerning costs would be premature at this stage and a miscarriage of justice. That company submits that generally an exercise of a power to award costs involves costs "following the event" unless there are factors which militate against the successful party being awarded all of the party's costs. The "event" refers to the event of the claim or the appeal, as the case may be, and may be understood as referring to the practical result of a particular claim or appeal. In this case, there has been no "event". The matter has not been determined as it has been remitted to the Tribunal for re-determination. Neither party has obtained "a practical result" on appeal and either party may be successful on the re-determination or further appeal. It is inappropriate for a costs order to be made at this stage. Rather, costs should follow the event which has not yet been determined.

Decision

In brief terms, the decision at first instance determined that the homeowners' contract was not with BH Constructions, but was with another (related) company. The homeowners appealed alleging that that decision was in error. BH Constructions opposed the appeal and argued that the first instance decision was correct in determining that the contract contended for by the homeowner was with the other (related) company. The Appeal Panel has found in favour of the homeowners and has ordered that the proceedings between the homeowners and BH Constructions be remitted to the Consumer and Commercial Division to be determined. This involves a first instance hearing concerning the contentions by both parties in relation to the contract which the Appeal Panel has determined was entered into between the homeowners on the one hand and BH Constructions on the other.
There have been many cases concerned with identifying the relevant "event" for the purposes of deciding a costs application. In Australian Receivables Ltd v Tekitu Pty Ltd (Subject to Deed of Company Arrangement) (Deed Administrators Appointed) & ors [2011] NSWSC 1425, Ward J quoted with apparent approval the English Court of Appeal decision in Roache v News Group Newspapers [1992] TLR 551 as cited by the Queensland Court of Appeal in Timms v Clift [1998] 2 Qd R 100 which Her Honour said that the English Court of Appeal had usefully posed the question as to who is to be seen as the successful party "in the event" as being a question as to: "...who, as a matter of substance and reality, had won? Had the plaintiff won anything of value or anything he could not have won without fighting the action through to a finish? Had the defendant substantially denied the plaintiff the prize which the plaintiff fought the action to win?"
The event in this case is the dispute as to the identity of the party contracting with the homeowners. The homeowners' contentions have been successful on appeal and the contentions of BH Constructions have failed. In our view, that dispute was the event which has been resolved in favour of the homeowners.
Accordingly, we are of the opinion that the submissions of BH Constructions should be rejected. The homeowners have achieved a practical result, namely the determination of the opposite contracting party.
In these circumstances, it is appropriate that there by an award of costs in favour of the homeowners. We agree with the homeowners' submissions that rr 38 and 38 A of the Rules apply to this appeal. The effect of r 38 A is to provide that despite s 60 of the NCAT Act (which generally states that each party should pay their own costs unless the Tribunal determines that there are special circumstances justifying an order for costs), the Appeal Panel must apply the first instance provisions when deciding whether to award costs in relation to an internal appeal. In this case, the first instances costs provisions are those contained in r 38. The relevant parts of r 38 are contained in r 38(2)(b). In essence, that provides that despite s 60 of the NCAT 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 the amount claimed or in dispute is more than $30,000.00. That is the case in respect of this appeal. Notwithstanding, that the amount claimed or in dispute is more than $30,000.00 there is still a discretion as to whether the Tribunal should award costs as is evidenced by the language of the rule, namely that the Tribunal "may" award costs. In this case, the parties have borne the additional costs of the appeal by reason of the existence of the dispute as to the identity of the company contracting with the homeowners. BH Constructions has unsuccessfully opposed the homeowners on the appeal and, in our view, it is just that the costs of the appeal incurred by the homeowners be paid by BH Constructions.
The homeowners make the further submission that a hearing on the matter of costs be dispensed with pursuant to s 50(2) of the NCAT Act. BH Constructions has not made a submission as to whether a hearing should be dispensed with but has had an opportunity to respond to the homeowners' submissions in that respect. We are of the opinion that a hearing on costs is not required and that it is appropriate to order that a hearing on the question of costs be dispensed with.
Accordingly the orders below will be made.

Orders

The Appeal Panel makes the following orders: 1. A hearing on the matter of costs of the appeal is dispensed with pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013; 2. The respondent is to pay the appellants' costs of the appeal as agreed or as assessed. 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: 26 April 2019

At a glance

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Judgment (5 paragraphs)

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Cases Cited (2)

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