Liang v Wincrest Group Pty Ltd

NCAT Appeal Panel|2020-04-28

REASONS FOR DECISION

On 24 May 2018 the Appeal Panel delivered reasons for dismissing an appeal from a decision of the Tribunal in the Consumer and Commercial Division of the Tribunal dismissing their claim under the Home Building Act 1989 (the HB Act) against Wincrest Group Pty Ltd (the Builder), and the subsequent decision to order them to pay the Builder's costs.
The orders made 28 May 2018 included orders for the parties to make submissions on any application for an order for costs of the appeal, those submissions to include submissions on whether the question of costs may be determined on the papers and without a hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act).
On 31 May 2018 the respondent to the appeal applied for an order for costs of the appeal. The appellants did not provide any submission in response.
The application for costs of the appeal was made some time ago. It has not been dealt with due to an administrative error of the Tribunal. This occurred in circumstances where the appellants made no submissions in reply that the application and it was not until a file review that the Appeal Panel became aware that the application remained unresolved.
The parties were contacted and the respondent confirmed its position that it wished to have its application dealt with. The solicitor who had acted for the appellants on the appeal advised the Tribunal that their previous instructions received in June 2018 were not to prepare any submissions in reply. They had forwarded the letter to the appellants, and had not received any further instructions as to whether they propose to prepare any submissions in reply to the costs application.
On 3 March 2020 the appellants contacted the Tribunal and requested that any further emails or letters be sent directly to them rather than the solicitor, and requested further time to respond to the costs application. A short extension was granted, and the Tribunal received a submission from the appellants on 24 March 2020.

Whether a hearing on costs should be dispensed with

Section 50 of the Civil and Administrative Tribunal Act 2013 (the NCAT Act) relevantly provides: 50 When hearings are required (1) A hearing is required for proceedings in the Tribunal except: … (c) if the Tribunal makes an order under this section dispensing with a hearing, or … (2) The Tribunal may make an order dispensing with a hearing if it is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Tribunal. (3) The Tribunal may not make an order dispensing with a hearing unless the Tribunal has first: (a) afforded the parties an opportunity to make submissions about the proposed order, and (b) taken any such submissions into account. (4) The Tribunal may determine proceedings in which a hearing is not required based on the written submissions or any other documents or material that have been lodged with or provided to the Tribunal in accordance with the requirements of this Act, enabling legislation and the procedural rules. …
The original directions made by the Appeal Panel on 28 May 2018 in relation to any costs application required the parties to also make submissions about whether an order should be made dispensing with a hearing. Neither party has suggested a hearing is required. The parties have had an opportunity to make submissions as to whether a hearing on costs was required. The Appeal Panel is satisfied that the issue of costs can be adequately determined in the absence of the parties by considering the parties' written submissions. The parties would be put to unnecessary expense if a hearing on costs were held.
The order under s 50(2) of the NCAT Act has accordingly been made.

Costs application

The respondent submits that in the proceedings in the Consumer and Commercial Division the appellants originally sought payment of $78,603.00, later amended to $112,396.00. Rule 38 of the Civil and Administrative Tribunal Rules 2014 (the Rules) accordingly applied, and costs could be awarded in the absence of special circumstances. Rule 38A applies to the appeal.
The respondent submits that the appeal lacked merit and was completely unsuccessful, and there was no conduct on its part that might disentitle it to an order for costs in its favour. The respondent acted reasonably in maintaining its opposition to the appeal, and the appellants should be ordered to pay its party/party costs on the ordinary basis.
The appellants submit that since the appeal their financial standing and health have declined, and the parties' circumstances should be considered. There was the additional cost in rent and mortgage expenses because of the delayed completion of the house, and a cost for additional stacker doors. The first appellant has had to close his business, and his business partner committed white collar crimes incurring additional debt. He is unable to find work, and there is one child studying, with a mortgage. The closure of the business and deaths in the family and the loss of the case and the appeal have caused depression and anxiety. The appellants submit that there should be no order for costs so each party would pay their own costs.

Discussion and findings

Rule 38(2)(b) of the Rules applied to the proceedings in the Consumer and Commercial Division, as the amount claimed or in dispute in those proceedings was more than $30,000. The Tribunal had power to make an order for costs even in the absence of special circumstances, and had a general discretion in relation to the award of costs. Rule 38A of the Rules applies to the appeal, and the Appeal Panel must apply the first instance costs provisions in deciding whether to award costs in relation to the appeal.
The Tribunal has a wide discretion to make an order for costs, and rule 38 does not specify the factors the Tribunal must take into account in exercising the discretion. Where an application has been heard and determined on the merits, the appropriate starting point for the exercise of the discretion is the well-established position at common law; that is, that the purpose of making a costs order is to provide compensation to the party in whose favour the order is made for the expense the party has been put to in prosecuting or defending legal proceedings. In general terms, this means that a party who is successful is entitled to an order for costs in its favour: Latoudis v Casey (1990) 170 CLR 534; Oshlak v Richmond River Council [1998] HCA 11.
The starting position is, accordingly, that the respondent is entitled to recover its costs of and incidental to the appeal proceedings in circumstances where there has been no submission that there has been disentitling conduct on its part to cause the discretion to award costs in its favour not to be exercised: Owners Corporation SP 79417 v Trajcevski (No.2) [2017] NSWCATAP 173. However, as discussed by the Appeal Panel in Thomson v Chapman [2016] NSWCATAP 6 at [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, and nor is there any rule that a successful party might not be ordered to bear the costs of an unsuccessful party. In circumstances where there is a general discretion to award costs, the Tribunal in exercising its discretion is to have regard to the nature of the proceedings before it and all relevant factors arising in connection with those proceedings for the purpose of determining what order for costs, if any, should be made.
The appellants were not successful in establishing any of the grounds of appeal against the order made in proceedings HB 17/21716, and were not successful in establishing either of the grounds on which leave to appeal was sought. No disentitling conduct in the appeal has been asserted or established. The only factor that might be relevant in considering whether the usual rule that the successful party should have the costs of the appeal is the current circumstances of the appellants. In the absence of supporting evidence, the Appeal Panel is not persuaded that there is a basis on which the usual rule should be displaced.
The appellants should pay the costs of the respondent, on the usual basis. It is a matter for the parties whether agreement can be reached on an appropriate amount of costs.

Orders

The Appeal Panel orders: 1. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013, a hearing on the question of costs of the appeal is dispensed with. 2. The appellants are to pay the respondent's costs of the appeal as agreed or 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: 28 April 2020

At a glance

Court

Decision date

Source

Judgment (6 paragraphs)

Parties

Cases Cited (5)