Levy v Mercedes-Benz Australia/Pacific Pty Ltd

NCAT Appeal Panel|2024-05-02

Introduction

On 18 June 2024 we made orders in this appeal setting aside an order made in the original proceedings dismissing the appellant's claim and requiring the respondent to repair or replace the steering wheel on the appellant's motor vehicle, such work to be completed before 31 July 2024. We published reasons for this decision: Levy v Mercedes-Benz Australia/Pacific Pty Ltd [2024] NSWCATAP 110.
Our orders permitted either party to make an application for costs. The appellant did so by filing an application and submissions on 1 July 2024. The respondent did so by application dated 2 July 2024.
Each party files submissions in support of their own application and submissions in response to the other party's application.
As necessary, we will refer to the submissions below.
The orders also required the parties to provide submissions about whether an order should be made pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) dispensing with a hearing. The appellant made no submissions on this matter. Nor did the respondent suggest a hearing of the costs application was necessary.

Appellants application for costs

The appellant sought an order that he be paid costs of the appeal being a total of $9,818.45. The amount was made up as follows: 1. an amount of $9,015.66 being the time he says he spent in preparing his appeal and attending the hearing (a total of 25:45 hours) at a rate of $354.25 per hour; and 2. disbursements totalling $802.79 which included the appeal application fee, the costs of sound recordings and various printing and transcription cost.
The application is made under s 60 of the NCAT Act, the appellant contending there were special circumstances warranting the making of an order for costs in his favour. His application was in the following terms: Orders Sought The Respondent (sic) seeks an order for special circumstances under s60 of the Civil and Administrative Tribunal Act 2013 that the RESPONDENT pay a Total of $9818.45 made up of the Applicants' direct disbursements costs ($802.79) and also to pay compensation for the Appellants time and costs spent in preparing and representing himself in the appeal ($9015.66). There can be no doubt that the orders made by the Appeal Tribunal highlights that these are indeed special circumstances since; S • Mercedes has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings by not honouring it's warranty and taking the stance that MBAuP considers your NCAT appeal application dated 29 January 024 somewhat vexatious and personal in nature with no basis in fact or law (refer to email attachment) and "The Respondent considers the Appellant's appeal frivolous, vexatious. misconceived and lacking in substance and as such requests the Tribunal dismiss this appeal pursuant to s 55 of the NCAT Act" (Refer to RESPONDENT'S REPLY TO APPEAL dated 4 April 2024) • Based on the orders of the Appeal Tribunal, the Appellant should never have been made to wait from August 2023 to June 2024 to obtain a fair outcome on a simple warranty promise and obligation- it chose to deny the Appellant it's rights under Australian Consumer Law. • Mercedes has made a claim that the appellant's warranty claim had no tenable basis in fact or law and instead of simply replacing a steering wheel, it chose to fight the consumer and employ an engineering expert at considerable time and cost who was not able to support Mercedes Benz's stance • Mercedes Benz was offered an opportunity on more than 5 separate occasions to replace the steering wheel which is bluntly refused, and should it had simply fulfilled its warranty obligations then clearly a great amount of time cost and effort would not have been avoided by all parties concerned including that of the Tribunal
Section 60 of the NCAT Act provides that each party is to pay their own costs. However, the Tribunal may award costs if satisfied there are special circumstances warranting such an award: NCAT Act ss60(1) and (2). Special circumstances means circumstances that are out of the ordinary but not necessarily extraordinary or exceptional: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11].
As to the matters relevant to determining whether there are special circumstances, s 60(3) provides: 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.
Costs are compensatory: see eg Oshlack v Richmond River Council (1998) 193 CLR 72 per Brennan CJ at 75 and Thompson v Chapman [2016] NSWCATAP 6 (Thompson).
An individual who is a party to proceedings is not entitled to recover costs associated with their own time in preparing their application or attending any hearing: Cachia v Hanes and Another (1994) 179 CLR 403; [1994] HCA 14 (Cachia); Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29; 269 CLR 333. Consequently, the appellant is not entitled to be compensated for costs in respect of his own time in undertaking work in connection with this appeal.
As to the claim for disbursements, we are not satisfied the matters identified by the appellant constitute special circumstances nor that any discretion should be exercised in favour of the appellant to displace the usual position that each party is to pay their own costs.
The respondent had been successful in first instance. The appellant brought the appeal and was successful on appeal. Those facts do not establish the respondent acted in any inappropriate way in defending the appeal.
The fact the respondent may have asserted that the appeal was "vexatious and personal in nature with no basis in fact or law" or that it was frivolous, vexatious, misconceived and lacking in substance and should therefore be dismissed" are not of themselves reasons to find special circumstances existed warranting an award for costs. Such allegations did not unnecessarily complicate the appeal or cause the resolution of the appeal to be protracted.
The other matters raised by the appellant, namely that he was "unnecessarily disadvantaged [by the respondent] … not honouring its warranty and taking the stance" in the appeal to the effect the proceedings were vexatious etc again do not establish special circumstances. This is particularly so where the respondent had been successful in the proceedings at first instance.
The mere fact the appellant was successful in the appeal because we took a different view to that of the Tribunal at first instance does not demonstrate circumstances out of the ordinary. Rather, it is quite ordinary for appeals to be commenced by a party exercising a right to do so under section 80(2)(b) of the NCAT Act where they are aggrieved by the decision under appeal.
Otherwise, the time taken to hear and determine the appeal was not prolonged, let alone unreasonably prolonged by any conduct of the respondent. The appeal was lodged in April, and was finalised by us in June. There was nothing out of the ordinary in this regard.
Finally, there are no matters identified which would amount to the respondent causing unnecessary disadvantage to the appellant nor was the nature or complexity of the proceedings such that we should conclude there was special circumstances.
There was a factual dispute concerning why the coating of the steering wheel failed and what the evidence established. There was also a dispute concerning the proper interpretation of the warranty. The Tribunal's role is to resolve such disputes. However, these issues were not of such complexity or litigated by the respondent in a manner which would lead to the conclusion that special circumstances exist.

Respondent's application for costs

The respondent seeks to recover the cost of its expert, Dr Casey. The amount sought is $3,960 inclusive of GST. This application is also made under s 60 of the NCAT Act.
The application concerns the cost of the proceedings at first instance, not the appeal.
The respondent relies on offers of compromise dated 1 September 2023 as well as an offer said to have been made at an earlier conciliation that occurred at the Tribunal on 25 August 2023. In short, the respondent says the appellant did no better in the outcome obtained on appeal than the offers which were made and that the refusal to accept the respondent's offer constitute special circumstances entitling the respondent to be paid the costs of its expert. 1. There is adequate authority for the proposition that an offer of compromise which has been unreasonably refused may constitute special circumstances warranting an order for costs. A claimant must establish any refusal to accept an offer was unreasonable: see eg Thompson at [91]. If unreasonableness is established, there is then a discretion as to whether an award for costs should be made.
We have no evidence as to the offer made on 25 August 2023, other than in the most general terms. Certainly there is no evidence that offers made during conciliation were on the basis that they were "without prejudice save as to costs". As such, there is no basis to award costs for a failure to accept any offer made on the day the proceedings were listed in the Tribunal.
As to the offer of 1 September 2023 (September Offer), this is contained in a letter to the appellant which included the following: … (i) MBAuP will at your election, either: (a) have the existing leather on the Vehicle's steering wheel repaired by a third-party repairer ("Repair"); or (b) replace the Vehicle's steering wheel with a new one at a cost to you of $1,125 inc GST (approximately half the price of a new steering wheel and associated labour costs) ("Replacement"). … (iii) You agree not to further prosecute the NCAT Matter, withdraw the NCAT Matter and fully release and discharge MBAuP, it's Authorised Retailers and all of the related entities from all claims, including future claims, that in any way relate to or arise out of the NCAT Matter. …
Of these submissions, the appellant says: The stance adopted by the Respondent in its reply to (1) claim costs and (2) deny special circumstances for the Appellant to claim costs is an attempt by the Respondent to show the Appellant as a villain which is entirely wrong: it is factually precise that no repair was offered on a fair basis according to the standard warranty terms or ACL, and the repair or replacement was only subject to accepting a settlement deed where the Appellant was to agree to several terms and conditions not contained in terms of the warranty and further a replacement was subject to the Appellant having to pay cost which is against the warranty promise of a no cost replacement or repair for defective products. The fact is that the product has been deemed defective by the NCAT Appeal Division.
We do not accept the appellant did no better than the September Offer. That offer, if accepted, would have operated as a general release in connection with the motor vehicle and prevented the appellant from relying on the warranty and/or calling upon the respondent to repair any other defects that might arise in the motor vehicle at a later date. Further, it was not unreasonable for the appellant to reject the offer. As far as it related to a replacement of the steering wheel (rather than its repair), the offer required him to make a financial contribution of $1,125. The appellant obtained an outcome more favourable than this part of the offer.
Consequently, special circumstances have not been established by the respondent.
As no offer was made in connection with the appeal, it was otherwise necessary for the appellant to challenge the original orders, a challenge which was successful.
In these circumstances, no order for costs should be made in favour of the respondent.

Orders

It follows that the each party's application for costs should be dismissed and each party should pay their own costs in the proceedings at first instance and in the appeal.
The Appeal Panel makes the following orders: 1. A hearing of the applications for costs is dispensed with pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) 2. Each party is to pay their own costs of the proceedings at first instance and of the appeal.

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: 08 August 2024

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