Lukas trading as Stone Obsessions NSW v Carstens

Should the application be appeal without a hearing?

1. Section 50 (2) to (4) of the CAT Act provides: (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.
2. In this case both parties were advised that the costs issue might be determined on the papers and were invited to express any opposition they had to that course being followed. No objections have been received. Having reviewed all the materials we are satisfied that this is matter that can be determined in the absence of the parties by considering the materials lodged by them. We therefore dispense with a hearing.

What are to applicable costs rules?

1. Rule 38A of the NCAT Rules sets out the rule that applies to costs in internal appeals such as this: (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.
2. As the initial proceedings between the parties were in the Consumer and Commercial Division of the Tribunal, rule 38 of the NCAT Rules applies. It provides: (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.
3. In Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 the Appeal Panel considered the meaning of 'the amount claimed' and "the amount … in dispute" in rule 38(2)(b) in appeal proceedings. The Appeal Panel said, in a frequently cited passage, at [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;
4. The fact that the value of the property the subject of any appeal exceeds $30,000 does not, of itself, mean that "the amount ... in dispute" in that appeal is greater than $30,000.
5. For rule 38A to apply therefore, realistically more than $30,000 had to be at stake on the appeal. The fact that more than that amount was at stake in the original application brought by the respondents, does not mean that the same amount was in issue on the appeal. The order being appealed against (order 4) required the appellant to obtain a certificate of insurance under the Home Building Compensation Fund in the sum of $40,000. Whether or not insurance cover for that amount could be obtained, clearly involved a potential benefit or detriment to the parties of an amount exceeding $30,000. Arising in the context of a claim for damages for allegedly faulty building works of $69,250.00, we think that, realistically, more that $30,000 is at stake and in dispute in an appeal of that order.
6. As a result, any costs order made by the Appeal Panel will be made under rule 38(2)(b) in which costs follow the event, rather than on the basis of special circumstances existing as provided s 60(1) to (3) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act). It should be noted s 60(4) provides that in making a costs order the Tribunal may determine - (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.
7. Under s 60(4)(a) the Appeal Panel has power to fix the costs payable under an order: see Chi v Roger Fuller Pty Ltd (No 2) [2018] NSWCATAP 220 at [49]; Hanna v BOS Holdings Pty Ltd (No 2) [2019] NSWCATAP 73 at [15]; and Five D Pty Ltd v The Owners-Strata Plan No. 79642 [2018] NSWCATAP 244 at {31-32]. In Bechara trading as Bechara and Company v Bates [2016] NSWCA 29 the Court of Appeal (Beazley P; Meagher JA; Payne JA), when discussing making a lump sum or fixed cost order under s 98 of the Civil Procedure Act 2005 (NSW) explained that, at [12-15]: The power to award a lump-sum should only be exercised when the Court considers that it can do so fairly between the parties and where an appropriate sum can be determined from the available materials: Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at 742-723 [21]-[22]; Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 123. The power may also be exercised where a party's conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings: Hamod v New South Wales [2011] NSWCA 375 at [818] per Beazley JA (Giles and Whealy JJA agreeing). A "broad brush" approach is appropriate. To require the same or similar level of detail as in a formal costs assessment would defeat the purpose of the lump sum order: Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1; [1999] FCA 673 at 5 [16]; Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121 at [7]. The courts have typically applied a discount in assessing costs on a gross sum basis: Hamod v New South Wales at [814].

The costs order sought.

1. The respondents seek an order that the appellant pay their costs fixed at $5,807.83, as set out in tax invoices provided by their solicitors and counsel. They simply say that as a result of the withdrawal of the appeal those costs have been thrown away. In their submissions they do not recommend or offer a discount to be applied, given that they are seeking a lump sum order. They do not specifically seek costs on an indemnity basis.

The appellants submissions.

1. The appellant has not made any submissions himself. The Appeal Panel has received correspondence from his wife, purporting to be written on his behalf. She has not, however, sought or been granted leave to represent him under s 45 of the NCAT Act.
2. We note that the correspondence explained that the appeal had been made because the appellant's licence to do residential building work had not been renewed by Fair Trading, because he had not complied with order 4 made by the Tribunal. The appeal had then been withdrawn because the appellant could not afford it. Some details of the appellant's current debts were provided.
3. We also note that the notice of appeal was prepared and filed by a solicitor on his behalf.

Conclusion.

1. Impecuniosity is not a defence to a costs order. The reality in this case is that the appellant, more than two years after the original order was made, filed an appeal, in which he sought an extension of time in order to bring the appeal. Five weeks later the appellant withdrew that appeal. In the meantime, the respondents were put to the costs of seeking legal advice and engaging representative to defend the appeal. Those costs were thrown away by the withdrawal.
2. The respondents are entitled to an order that the appellant pay their costs of the proceedings.
3. The respondents seek a lump sum order for $5,807.83. To make such an order would in effect be making an indemnity costs order for all of the respondent's costs, without considering the reasonableness of the charges made. No submission has been made to us as to why we should allow such an amount on that basis, and we see no reasons for doing so. The respondents are entitled to costs on a party/party basis.
4. Section 36(1) of the NCAT Act provides: The guiding principle for this 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.
5. Given the guiding principle of the Act and the fact that the appeal proceeding was very short and procedurally uncomplicated up until their withdrawal, we think this an appropriate case in which to make a lump sum or fixed costs order. The assessment of the costs recoverable by the respondents is a relatively simple matter when taking a broad brush approach. Making a fixed costs order will also avoid the extra complexity and costs to all parties associated with an assessment of costs. Such an order can be made on the basis of the materials provided to us. We note that a similar approach was adopted by the Appeal Panel fairly recently in Roberts v Chan & Naylor Parramatta Pty Limited (No.2) [2019] NSWCATAP 62 .
6. In fixing the costs we have had regard to a number of concerns we hold as to the reasonableness of the costs claimed by the respondents. We do not think counsel's changes for attending a directions hearing ($650.00 per hour) of for conferring ($500.00 for the first hour and then $450.00 per hour) reasonable or proportionate on a party/party basis in a matter before the Tribunal, albeit at Appeal Panel level. We see no need for both solicitor and counsel to attend (at a half rate for $220.00 per hour for the solicitor) a directions hearing. We note that the respondents' solicitor appears to have been charging at a rate of $440.00 - although we do not have a copy of the solicitors costs agreement - and question the reasonableness of that charge in a matter of this type in which counsel has been retained.
7. Taking those matters into account and applying a broad brush approach we will apply a discount of 30% to the lump sum sought by the respondents. This result is the respondents costs being fixed at $4.065.48 which sum should be paid by the appellant to the respondents within 28 days.

Orders.

1. The Appeal Panel makes the following orders: 1. A hearing of this proceeding is dispensed with under s 50(2) of the Civil and Administrative Tribunal Act 2013. 2. The appellant is to pay the respondents costs fixed at $4.065.48 within 28 days.

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: 20 October 2021