Kora v Ian's Roofing Pty Ltd

Respondent's submissions

1. The respondents invoke r 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules) as the relevant costs rule. They say that as the appellants claimed $150,000.00, r 38 applies. Put simply, the respondents say that as the successful parties, and not having committed any disentitling conduct, the appellants having been unsuccessful, they are entitled to their costs.
2. The respondents seek a lump sum costs order for $7,133.71 or, alternatively, an order for costs as agreed or as assessed.

Appellant's submissions

1. We summarise the appellants' submissions as follows: 1. The Tribunal did not give effect to the guiding principle and therefore that principle should be "given in effect in respect of costs". 2. The respondents elected to seek legal representation and to incur costs, notwithstanding that the respondents were already at an advantage given that: 1. The respondents "know the law" related to the industry in which they operate and for which they hold licences, whereas "this law was new to the [a]ppellants". 2. Maria Silva, a director of the second respondent entity at the time of the "illegal work", has prior experience at the Tribunal, whereas the appellants do not. 3. The respondents "had an advocate for them in the first instance", being their expert witness who was able to assist them prior to and during the hearing. 1. The case and "the factual matrix of the proceedings" were not complex or complicated and did not require the engagement of counsel. 2. The appellants are at no benefit by Miss Kora being a corporate solicitor and they should not be, and should not have been, held to a higher standard simply because: Miss Kora holds a current practicing certificate. Doing so is akin to expecting members of CAT divisions to have the same specialised knowledge as members of all other NCAT divisions or a property lawyer at a commercial law firm being expected to know how to complete a take private. Miss Kora is a home owner who was seeking a just result for the illegal work completed by the Respondents. The Appellants elected to proceed without legal representation, and were comfortable doing so given [the Tribunal's] guiding principle, in order to avoid incurring costs. Senior Member Tyson found that the Appellants were not legally represented in the first instance regardless of Miss Kora's qualification. 1. There has been disentitling conduct by the respondents. 2. Legal costs should not be awarded to a party that has been: unjustly enriched for completing illegal work. The Appellants are the victims and have already been penalised enough. The Appellants are (literally) left to pick up the pieces. The Respondents' behaviour has been so discreditable that the denial of costs is warranted. 1. The respondents should claim litigation costs under their insurance policy, "on the assumption they have insurance (we realise their failure to take out insurance may be systemic)" and pay any deductible required. The appellants have had to pay deductibles to repair damage caused by the respondents' "illegal work (noting insurance does not cover the illegal roof replacement)". 2. The appellants did not try to argue their case a second time. The appellants: had no reasonable alternative but to commence an appeal and simply exercised their legal right to seek leave to appeal where they believed (and continue to believe) that there has been a gross injustice. No person should pocket around $20,000 for illegal work and be compensated for costs incurred because of that illegal work. Although the Respondents were put to expense by the appeal being initiated, there was good reason to make an appeal. 1. The appellants have acted and continue to act reasonably in defending and commencing the appeal proceedings. 2. The proper exercise of the costs discretion should mean that no order in favour of the respondents as to costs should be made and that costs should be awarded in the appellants' favour in respect of ancillary costs. In the alternative, each party should bear their own costs.

Respondent's submissions in reply

1. In reply, the respondents submit that: 1. The appellants' submissions make no reference to any statute, decided case or practice relating to costs. 2. The appellants' submissions are cast in emotive language and are overly focused on the proceedings at first instance. 3. The appellants' references to disentitling conduct of the respondents are devoid of any substance. 4. An oral submission made during the course of the appeal hearing that the respondent's legal representative "has not been repeated and should rightly be regarded as abandoned".
2. In relation to this last point, we note that at the commencement of the appeal hearing, apparently without notice to Mr Lucas, Miss Kora submitted that Mr Lucas (who appeared for the respondents) did not have a practising certificate. Miss Kora gave evidence from the Bar table that she had made enquiries with the Bar Association which had given her that information.
3. Mr Lucas indicated that he did hold a practising certificate as a barrister, although there had been a period of several years when he had practised as a solicitor. He indicated that he was re-issued with a practising certificate as a barrister late in 2022.
4. We asked Miss Kora what, if any, application she was making in relation to her uncorroborated assertion. After considerable hesitation, Miss Kora, not understanding the question, said that she was seeking an order that the respondents be prevented from recovering any costs of Mr Lucas' representation on the basis that he did not hold a practising certificate.
5. At the hearing, we indicated that when and if any such submission was made in relation to any application for costs, we would deal with the matter then.
6. The appellants did not repeat the assertion about Mr Lucas' practising certificate in their response to the costs application. We simply observe that the submission made by Miss Kora was a very serious one to make, and potentially improper and unethical, if not correct.

Relevant costs rule and principles

1. As noted, the respondents submitted that r 38 is the applicable costs rule. In Hanave Pty Ltd v Wine Nomad Pty Ltd; Wine Nomad Pty Ltd v Hanave Pty Ltd (No 2) [2022] NSWCATAP 361 appellants did not identify any particular costs rule.
2. There are in fact two potentially applicable costs rules.
3. The first is s 60 of the NCAT Act which provides: 60 Costs (1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following - (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36(3), (g) any other matter that the Tribunal considers relevant. (4) If costs are to be awarded by the Tribunal, the Tribunal may - (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis. (5) In this section - costs includes - (a) the costs of, or incidental to, proceedings in the Tribunal, and (b) the costs of, or incidental to, the proceedings giving rise to the application…
4. The second is r 38 of the Rules. Rule 38 provides: 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.
5. We note that r 38A(2) provides: (2) Despite section 60 of the [NCAT] 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.
6. In the Appeal Decision, we stated that: 2. In matter HB 22/34909, filed 3 August 2022 (the Roofer's application), the Roofer sought an order that the Homeowners pay it $4,400.00 in respect of unpaid work. The Tribunal dismissed that application. 3. In matter HB 22/36753 filed 15 August 2022, (the Homeowners' application), the Homeowners sought orders described by the Tribunal at [2] of the Decision as: orders to be relieved of any obligation to pay the $4,400.00 to the Roofer, an order that the Roofer pay them $21,323.50 and orders for "compensation". The compensation sought by the Cross-Claimants includes $67,943.20 as a "genuine estimate of time spent" by the Cross-Claimants, $3,056.542 for "annual leave taken", quotations to have the roof replaced at the Paddington property, repair and painting costs for some of the brickwork at the Paddington property and its garage, as well as reimbursement for travel costs, courier costs and other ancillaries.
7. As the Appeal Panel noted recently in S&J Harris Building Services Pty Ltd v Jacques [2023] NSWCATAP 35: 43. It is necessary to note that the Builder's application and the Homeowner's application were two separate applications before the Tribunal and separate costs decisions were made in respect of each. While we accept that, as submitted by the Builder, the two applications were "intertwined", it was appropriate (and legally correct) for the Tribunal to deal with the costs of each application separately. To cite but one example of where the Tribunal has done so, see CPD Holdings Pty Limited v Baguley [2016] NSWCATAP 103.
8. See too Hanave Pty Ltd v Wine Nomad Pty Ltd; Wine Nomad Pty Ltd v Hanave Pty Ltd (No 2) [2022] NSWCATAP 361at [42] to [46].
9. Therefore, in relation to the respondents' claim before the Tribunal, the relevant costs rule would have been s 60 of the NCAT Act. However, their claim to be paid $4,400.00 was dismissed: Appeal Decision at [2].
10. In relation to the appellants' claim before the Tribunal, the relevant costs rule would have been r 38 of the NCAT Rules, because the amount claimed exceeded $30,000.
11. As the appeal only concerned the appellants' application, the relevant costs rule is, as submitted by the respondents, r 38.

Appeal Decision

1. Before considering whether to make an order for costs, it is appropriate to summarise our reasons for dismissing the appeal.
2. We commenced the Appeal Decision by dealing with a number of misconceived or otherwise unmeritorious applications made by the appellants at the beginning of the appeal hearing.
3. The first was their application that the appeal should be dealt with under s 80(3) of the NCAT Act, namely by way of a new hearing, with evidence not before the Tribunal being relied on by the appellants.
4. For the reasons we gave at [15] to [27] of the Appeal Decision, we rejected that application. In summary, our conclusion was that: 24. We do not think that the grounds of appeal warrant a new hearing by the Appeal Panel. As we explained at the hearing, in circumstances where the Respondents' expert Mr Drexler was cross-examined before the Tribunal, but had not been required for cross-examination at the appeal hearing, in the event we decided to conduct a re-hearing, it was rather obvious that a s 80(3) rehearing could not be conducted, let alone with new evidence that was not before the Tribunal. 25. As we further explained at the appeal hearing, if we formed the view that the appeal should be allowed because there was a question of law raised, or leave to appeal granted because the Homeowners may have suffered a substantial misjustice, the appropriate course was to remit the appeal to the Tribunal for redetermination.
5. The second unmeritorious application was that the appellants be allowed to rely on videos and photographs dated on or about 11 August 2022 being: 1. video footage of Mr Greenslade on the footpath outside the appellants' house on 1 August 2022, apparently advising the appellants of the work to their roof that needed to be rectified; 2. video footage of the inspection of the appellants' roof undertaken by the Mr Greenslade and Mr Drexler on 11 August 2022; and 3. video footage of Mr Greenslade inspecting the damage said to be caused by the second respondent to the north facing wall of the appellants' house on 11 August 2022.
6. For the reasons we gave at [37] to [40] of the Appeal Decision, we rejected that application. In summary, our conclusion was that: 38. The applicable rule for presenting new evidence on appeal is that the materials sought to be relied on were not reasonably available at the time of the Tribunal hearing: Al-Daouk v Mr Pine Pty Ltdt/as Furnco Bankstown [2015] NSWCATAP 111. As the Appeal Panel stated in Chapman v McLaughin [2016] NSWCATAP 212 at [37]: … The point of limiting fresh evidence to that which was not reasonably available at the first hearing is to ensure finality of proceedings. This means that it is in the interests of justice for parties to put forward all of their evidence as best they can at the hearing, as otherwise, if they were free to add fresh evidence after a case was decided, the proceedings would run the risk of not being finalised until after many hearings. This principle is of particular importance in the Tribunal because of the provisions of s 36 of the Act. That section requires the Tribunal to proceed to decide cases justly, quickly and cheaply. 39. The video evidence was available at the time of the hearing. The Homeowners, for whatever reason, did not attempt to rely on it at the Tribunal hearing. In the absence of any transcript of the directions hearing, we are not persuaded that the Homeowners were misled in any way.
7. The third unmeritorious application was that the appellants be permitted to rely on evidence described by them as "numerous videos and photos of the leaking roof and foreseeable consequential damage caused by the leaking roof". Those videos and photos were not available at the initial hearing as they were taken after that date. As was explained by the appellants: … two new roof leaks in the house are now apparent and so evidence of these new leaks is being provided with this appeal document. One of those leaks is in the main bedroom and the other is in the dining room. This means there are now not less than five locations in our house where water comes into the house because of the roof installed by the Respondent (being, two leaks in the dining room, two leaks in the lounge and one leak in the main bedroom). …
8. As we explained at [41] of the Appeal Decision, the rule in Al-Daouk did not apply, in that that evidence could never have been available as it relates to leaks which post-date the hearing. We noted that it was axiomatic that a Tribunal or Court determines an application on the basis of the evidence before it at the hearing (save for evidence that was not reasonably available), not on new evidence relating to events that occurred after the hearing.
9. Having determined those matters, we then explained to the appellants that we would not consider any grounds that had not been raised before the Tribunal.
10. In the Appeal Decision we stated: 8. The Notice of Appeal commences by setting out 17 grounds of appeal (pp 6 to 9), the orders the Homeowners now seek (pp 10 to 12), and the reasons why leave to appeal should be granted (pp 12 to 16). At pages 12 to 16 the Homeowners then set out their submissions as to why leave to appeal should be granted, namely because the Decision was not fair and equitable, against the weight of the evidence and that "significant new evidence" is now available. At pages 17 to 43 of the Notice of Appeal the Homeowners then set out 17 "issues". 9. As to the Homeowners' 74 pages of submissions, this document identifies 25 "issues" which they ask the Appeal Panel to consider. These issues are not articulated as grounds of appeal in the conventional manner, in that they do not identify questions of law or make any distinction between questions of law and grounds for which leave to appeal are required. 10. At the appeal hearing, Ms Kora confirmed that the 25 "issues" were actually the Homeowners' grounds of appeal and the other grounds and issues could be disregarded. Ms Kora indicated that grounds of appeal were not clearly articulated because, although she is an Australian legal practitioner, she is not a litigator.
11. We then turned to a consideration of the 25 grounds of appeal, none of which clearly identified a question of law. We noted that Ms Kora told us that grounds 9, 10, 11, 12 and 17 of the grounds of appeal were not raised before the Tribunal. Therefore, we did not consider those grounds in the Appeal Decision.
12. Of the remaining grounds, in summary, we found that: 1. Ground 1 was not a proper ground of appeal. 2. As grounds 8, 13 and 14, and 21 to 25, also had not been raised before the Tribunal, it was not appropriate to consider those grounds on appeal. 3. Grounds 2 to 7, 15, 16 (only in so far as ground 16 related to breaches of statutory warranty) and 18 to 20 raised errors other than question of law. In relation to these grounds, we concluded at [112]: In our view, the evidence before the Tribunal relied on by the [appellants] was entirely lacking. We see no error by the Tribunal on the basis of the materials before it. In our view, to the extent that the appeal raises errors other than questions of law, we are not satisfied that any ground involves an issue of principle, a question of public importance, an injustice which is reasonably clear or that the Tribunal has gone about its fact finding process in such an unorthodox manner that it is likely to have produced an unfair result.

Consideration of appellants' submissions

1. We accept the respondents' submissions, summarised at [8], as to the merits of the appellants' submissions. We consider that the appellants' submissions are entirely without merit. We shall make some brief comments on the more egregious misconceptions.
2. The submission that the Tribunal did not give effect to the guiding principle is misconceived, as it is the conduct of the parties in the appeal proceedings which is relevant to a costs application, not what the Tribunal below may or may not have done. In any event, this issue was not raised during the appeal.
3. The submission that the respondents were at an advantage over the appellants is without substance and irrelevant, and the submission that their expert advocated for the respondents misconceives the role of an expert witness.
4. The submission that there was disentitling conduct by the respondents is also without merit, as the conduct relied on by the appellants is the conduct of the respondents in the proceedings before the Tribunal; it does not relate to the conduct of the appeal, with which these reasons are concerned.
5. The submission that the respondents undertook "illegal work" overlooks the findings and outcome of their application before the Tribunal.
6. The submission that the respondents should claim litigation costs under their insurance policy is irrelevant to our costs determination.
7. The submission that the appellants are "the victims" and have "already been penalised enough" is self-serving and irrelevant.
8. Further, the appellants' costs submissions do not engage with the fact that their appeal was completely unsuccessful and that the respondents were completely successful in the appeal proceedings. This is demonstrated by the appellants' submission that they should be awarded "ancillary costs". The appellants' submissions do not explain the basis on which an unsuccessful party would be entitled to costs order in that party's favour.

Consideration of the respondents' application for costs

1. To the extent that the appeal dealt with matters relating to the appellants' application to the Tribunal, the applicable costs rule is r 38.
2. As the Appeal Panel stated in Thompson v Chapman [2016] NSWCATAP 6: 68. … Rule 38 provide[s] a general discretion in respect to the award of costs. 69. The starting point in exercising such discretion is that the "usual order for costs" is that a successful party should be entitled to an order for costs in their favour: see Latoudis v Casey [1990] 170 CLR 534 per Mason CJ at 554 and Oshlack v Richmond River Council per McHugh J at 97. 70. The reason for such an order is that it is appropriate for the party who incurred costs caused by the other party in litigation to be reimbursed. Further, an award of costs is by way of an indemnity to the successful party and not as punishment of the unsuccessful party: see Latoudis v Casey per Mason CJ at 543 and McHugh J at 567 and in Oshlack v Richmond River Council per Brennan CJ at 75. 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 bear the costs of an unsuccessful party: see Oshlack v Richmond River Council per Gaudron and Gummow JJ at 88 and Kirby J at 121 - 123. 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 (No 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 v Richmond River Council per Gaudron and Gummow JJ at 41 - 44.
3. We see no reason why the respondents are not entitled to their costs. The appeal was without any merit or substance. There was no disentitling conduct by the respondents. This is a matter where costs should follow the event, with the result that the appellants must pay the respondents' costs.

Application for gross sum costs order

1. The respondents seek a gross sum costs order for $7,133.71. In Kurmond Homes Pty Ltd v Spiteri [2015] NSWCATAP 48 the Appeal Panel stated: 25. … The "guiding principle" for the Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings: s.36(1). The Tribunal must seek to give effect to the guiding principle when it exercises any power given to it by this Act: s36(3)(a). 26. In addition, the practice and procedure of the Tribunal is to be implemented so as to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings: s36(4). 27. Given the amount in issue, I consider it would be disproportionate and contrary to the guiding principle to require either party to now have to have the costs assessed. This would add further delay and further expense to what has already occurred. Consistent with the proportionality principle the appropriate course is for the Appeal Panel to determine costs. If costs are awarded by the Tribunal, the Tribunal may determine by whom and to what extent costs are to be paid: s 60(4).
2. We think those observations are appropriate in the circumstances of the present application. We have therefore decided to make a gross sum costs order.
3. The sum of $7,133.71 claimed consists of: 1. $6,600.00 - Counsel's fees (including reading and preparation). 2. $45.00 - NCAT fee for the sound recording of the original hearing. 3. $393.86 - For transcription of the sound recording. 4. $42.60 - for binding of the transcript. 5. $52.25 - for binding of the annexures to the submissions in reply.
4. The appellants have specifically objected to the cost of the sound recording of the original hearing, which the appellants state they had already provided to the respondents and the cost of a transcript, which the appellants state was unnecessary.
5. In relation to those two items, the appellants have not stated when they obtained the sound recording of the hearing or when they provided it to the respondents. In the absence of this information, we are not satisfied that it was unnecessary or unreasonable for the respondents to obtain their own copy of the recording. We are satisfied that it was both necessary and reasonable for the respondents to prepare a transcript of the hearing. The respondents referred us to the transcript during the hearing and we in turn referred to the transcript in our reasons for decision.
6. In relation to the major component of the costs claimed - counsel's fees - the appellants have not submitted that this amount is unreasonable or excessive. We are satisfied that it is reasonable, particularly given that the Mr Lucas was briefed on a direct access basis and there is accordingly no claim for solicitor's costs.
7. The respondents did not file the invoices relevant to the costs claim due the page limitation we placed on the length of the submissions. The respondents state that the invoices have been given to the appellants. This has not been disputed in the appellants' submission. We therefore propose to order the respondents to file the invoices within seven days of the date of our orders and to order the appellants to pay the respondents $7,133.71 within 28 days.

Orders

1. The Appeal Panel orders: 1. A hearing is dispensed with under s 50(2) of the Civil and Administrative Act (NSW) 2013. 2. The respondents are to file the invoices on which they rely to support the application for a costs order in the sum of $7,133.71 within seven days of the publication of these reasons. 3. Upon compliance with order (2), the appellants are to pay the respondent's costs of $7,133.71 within 28 days of the publication of these reasons.

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: 03 April 2023