Kesuma v Gittany

NCAT Appeal Panel|2021-10-05

REASONS FOR DECISION

This decision relates to an application for costs made by the builder in relation to our earlier decision in Kesuma v Gittany [2021] NSWCATAP 46.
The Appeal Panel proceedings involved a decision of the Tribunal in relation to a dispute under the Home Building Act 1989 (NSW). The appellant who is a homeowner and the respondent who is a builder had made applications to the Tribunal.
In relation to the builder's application, the Tribunal had made an order that the homeowner was to pay the builder an amount of $21,500 and interest. The Tribunal had also ordered the parties to file and serve written submissions in the event that the parties did not agree in relation to the interest.
In relation to the homeowner's application the Tribunal had made an order that the builder pay the homeowner an amount of $9,685 and made work orders for incomplete and defective works.
The homeowner in effect appealed on two grounds: 1. The Tribunal erred in law by making a finding that the contract was on foot and was not validly terminated or abandoned, and it was incorrect to make an order for outstanding amount of $21,500 to be paid immediately. 2. The appellant sought leave to appeal on the basis that new evidence indicated that the builder was unlicensed and the Tribunal should not have made a work order.
The homeowner's appeal was unsuccessful and was dismissed.
On dismissing the appeal, we provided a timetable for the filing and serving of submissions in relation to any application for costs, and for submissions to deal with whether or not the party consented to the issue of costs being determined on the papers.
The Appeal Panel received submissions from the builder on 3 March 2021 and from the appellant homeowner on 19 April 2021. The appellant's submissions were late. He stated that was because he was stressed, sad, anxious and depressed. Although the appellant's documents were late, we have considered them in our decision.

Costs of the Appeal

Under s 60 (1) of the Civil and Administrative Tribunal Act 2013 (NCAT Act), , parties are bear their own costs. Under s 60 (2) of the NCAT Act, a cost order can be made if "special circumstances" are established. Section 60 (3) of the NCAT sets out the matters to which the Tribunal may have regard to in respect of whether "special circumstances" exist.
"Special circumstances" are circumstances that are out of the ordinary, but not necessarily exceptional or extraordinary. The discretion to award costs must be exercised judicially having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs: Mergerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11].
Rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) NCAT Rules states: 38 Costs in Consumer and Commercial Division of the Tribunal (1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal. (2) Despite section 60 of the 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 - (a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10(2) of Schedule 4 to the Act in relation to the proceedings, or (b) the amount claimed or in dispute in the proceedings is more than $30,000.
Rule 38A of the NCAT Rules states: 38A Costs in internal appeals (1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of - (a) enabling legislation, or (b) the Division Schedule for the Division of the Tribunal concerned, or (c) the procedural rules. (2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.
In respect of Rule 38A of the NCAT Rules, in Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 the Appeal Panel found at [57]: 57 Adapting these principles to the circumstances of the present appeals and having regard to the specific wording of r 38, it appears to us that in applying r 38(2)(b): (1) The determinative factor is the amount in dispute in each appeal, not the amount in dispute in the proceedings at first instance; (2) The phrase "in dispute" is to be construed as meaning truly in dispute or at issue or, inversely, not unrealistically in dispute; (3) Whether "the amount … in dispute" in each appeal is more than $30,000 depends on whether there is a realistic prospect that in each appeal the wealth of the appealing party would be changed by more than $30,000 or, put another way, whether the right claimed by the appealing party, but denied by the decision at first instance, prejudices that party to an amount in excess of $30,000 …
The builder submits that, because the homeowner had been ordered in the Tribunal proceedings to pay an amount of $21,500 to the builder and the builder was ordered to pay the homeowner $9,685, the combined amount claimed or in dispute in the appeal exceeded $30,000.
We do not agree with that submission or the characterisations of the amount in dispute. The Appeal Panel must consider whether the amount claimed or in dispute exceeds $30,000 in the Appeal Panel proceedings in respect of whether there is a realistic prospect that the wealth of the appealing party (the homeowner) would be changed by more than $30,000 dependent upon the outcome of the appeal.
The fact that the amount claimed, in dispute or ordered in the original proceedings exceeded $30,000 does not invoke r 38A of the NCAT Rules. For the provisions of s 60 (1) (2) and (3) of the NCAT Act not to apply, we must be satisfied that there is a realistic prospect the wealth of the appellant would be changed by more than $30,000 by reason of the outcome of the appeal.
As we stated above the homeowner's appeal was in relation to the order made by the Tribunal that the homeowner was to pay the builder an amount of $21,500 and in relation to the work orders for incomplete and defective works. Those grounds were both dismissed and there were no findings made either by the Tribunal or the Appeal Panel as to the amount in relation to the costing of the work orders. In those circumstances we are not satisfied that the amount in dispute did exceed $30,000.
Accordingly, we are not satisfied that Rule 38 and 38A of the NCAT Rules apply to the costs application in the Appeal Panel proceedings.
The builder made submissions in the alternative that, in any event, there are special circumstances which would warrant the making of a costs order in his favour. We are not satisfied that is the case for the following reasons: 1. The builder submits that the homeowner's appeal had no tenable basis in fact or in law and was lacking in substance. While the homeowner was not successful on appeal it cannot be said that the error of law or the leave grounds had no tenable basis or that the grounds were lacking in substance. They were grounds that were open to appeal and the fact that the homeowner was ultimately unsuccessful in that regard does not make them untenable. 2. The builder also states that the grounds of appeal were complex. The grounds raised were not particularly complex and the appellant was not represented, yet the matters were able to be understood and dealt with by the Appeal Panel on the appellant's submissions. 3. The builder submits that the homeowner did not assist in giving effect to the guiding principle noted in clause 36. They do not expand on this and we find nothing to support that submission. 4. Finally, the respondent states that the homeowner has since sold the property and that the builder has no legal right to return to do the works. It is unclear when the property was sold and, even if it was sold, how they deprived the appellant from being able to appeal on the grounds on which he did appeal. In any case, it did not impact the grounds of appeal as they were raised by the appellant. The appellant still had standing to raise the grounds on appeal.
We are not of the view that any of the matters raised by the builder amount to special circumstances or that we should make any order for costs .

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 his own costs of the appeal in accordance with s 60 (1) of the Civil and Administrative Tribunal Act 2013 (NSW).

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: 05 October 2021

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