Martins-Lopes v Keller

The parties' submissions

1. The tenants filed costs submissions on 11 September 2024 and seek a lump sum costs order in the amount of $1149.10.
2. The landlord filed costs submissions on 27 September 2024 and seeks a lump sum costs order in the amount of $3857.
3. We made orders for the tenants to file and serve any costs submissions in reply by 2 October 2024. On 18 October 2024 the tenants filed their costs submissions in reply and simultaneously applied for an extension of time for the filing of those submissions to 18 October 2024. The basis of this request was that the landlord had not provided a copy of his costs submission to the tenants, and that the tenants had only received the landlord's costs submission when it was forwarded to them by the Appeal Panel registry on 11 October 2024. On 22 October 2024 we directed that if the landlord opposed the tenants' extension of time request, any submission addressing this issue was to be filed by 24 October 2024. No submission was received from the landlord. We have decided to extend time for the filing of the tenants' submission in reply to 18 October 2024 because the tenants have provided a satisfactory explanation for the request, and because we are not aware of any prejudice to the landlords which may result from the relatively short extension of time.
4. The tenants submit we should "reject" the landlord's costs submissions because they were filed in the Tribunal two days after the due date (which was 25 September 2024), and because they were not served on the tenants at all. Although the landlord did not formally apply for an extension of time for the filing and serving of his costs submissions, we are not satisfied that there are grounds for rejecting those submissions. They were filed in the Tribunal only two days later than the due date of 25 September 2024, and, although we accept that the tenants did not receive those submissions until 11 October 2024, any potential prejudice to the tenants has been cured by our decision to extend the time for the filing of the tenants' submissions in reply.

Issues

1. The issues to be decided are: 1. Should a hearing on costs be dispensed with? 2. Should either party be ordered to pay the other party's costs of the appeal?

Should a hearing on costs be dispensed with?

1. Section 50 of the Civil and Administrative Tribunal Act 2013 (NSW) (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.
2. The parties were given an opportunity to make submissions as to whether a hearing was required. The tenants agreed in their written submissions that the issue of costs could be determined on the papers. The landlord has not addressed whether a hearing on costs is required and neither party has addressed whether a hearing on the extension of time request is required.
3. We are satisfied that the issue of costs and the extension of time request can both be adequately determined in the absence of the parties by considering the parties' respective written submissions. The parties would be put to unnecessary expense if required to argue these matters at a hearing. An order under s 50(2) of the NCAT Act has accordingly been made.

Should either party be ordered to pay the other party's costs of the appeal?

Legislative provisions and legal principles in relation to costs

1. The general rule in relation to costs in the Tribunal is that unless special circumstances are established, the parties pay their own costs: s 60(1) of the NCAT Act.
2. However, r 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) (the NCAT Rules) modifies the application of s 60 in proceedings before the Consumer and Commercial Division of the Tribunal, and r 38A modifies the position in respect of appeals.
3. 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.
4. Rule 38(2)(a) is not relevant to the present proceedings.
5. Rule 38A provides: 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.
6. Therefore, r 38(2)(b) will apply to the application for costs in this appeal only if the amount claimed or in dispute in the appeal was greater than $30,000 and r 38 applied to the proceedings at first instance.
7. Otherwise, s 60 is not displaced and costs may only be awarded if there are special circumstances warranting such an award.
8. Section 60(3) of the NCAT Act states: (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.
9. Special circumstances for the purposes of s 60(3) of the NCAT Act are circumstances that are out of the ordinary. They do not need to be exceptional or extraordinary: Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 at [60]; Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11].
10. Even if it is satisfied that there are special circumstances, the Tribunal must be satisfied that they are circumstances "warranting an award of costs"; that is, the Tribunal has a discretion as to whether to make such an award. 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: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11].

The parties' positions

1. The tenants say that r 38(2) applied in the first instance proceedings because the amount claimed in the first instance proceedings exceeds $30,000. They say that "the initial claim is sitting at $35,857.23 including the rent reduction up to the date of moving out, on 20/06/2024". Although not expressly argued, it is implicit from the tenants' submissions that they say that r 38A applies in the appeal.
2. The tenants also submit that if the Tribunal is not satisfied that r 38(2) applies, then there are special circumstances warranting an award of costs in their favour.
3. The landlord has not addressed whether r 38(2) applied in the first instance proceedings or whether r 38A applies in the appeal, but strongly disagrees that there are special circumstances warranting an award of costs in the tenants' favour.
4. The landlord has asked the Appeal Panel to make a costs order in his favour but has not explained the legal basis for this request.

Does r 38A apply in this appeal?

1. The tenants' submission that the claim "is sitting at $35,857.23 including the rent reduction up to the date of moving out on 20/06/2024" is misconceived. In their application to the Tribunal, the tenants claimed various monetary amounts which totalled $22,472.73. Leave was not sought, nor granted, for the tenants to increase the quantum of their claim to $35,857.23 or to any other amount. In any event, the matter was heard and decided on 1 May 2024 which was well before the date on which the tenants vacated the premises.
2. Accordingly, the amount claimed in the first instance proceedings was less than $30,000.
3. The tenants have not made any submission to the effect that the "amount in dispute" in the first instance proceedings was in excess of $30,000 and in any case, there is nothing in the materials before us which would support such a submission.
4. Accordingly, r 38 did not apply in the first instance proceedings and therefore r 38A does not apply in the appeal.

Are there special circumstances warranting an award of costs in the appeal?

1. The tenants submit the following are "special circumstances" warranting an award of costs in their favour: 1. The landlord did not comply with orders and directions made by the Consumer and Commercial Division of the Tribunal, including directions made at a hearing on 28 February 2024. 2. The landlord's non-compliance with those directions resulted in the tenants having to seek a summons, which the landlord did not comply with, that this resulted in the "initial hearing not go[ing] as planned, which led to the Appeal, and future rehearing of the case in the coming months". 3. The landlord has conducted his case in a way that "unnecessarily disadvantaged the tenants" by "attempting to intimidate the Appellants when requesting the Appellant to pay for the Respondent's enormous cost of travel (over $65,000)" (in respect of a summons issued to the landlord). 4. The landlord did not cooperate with the Tribunal in providing a "just quick and cheap resolution of the real issues in dispute" because he "refus[ed] to conciliate at the conciliation hearing despite a low to nil strength and when refusing to comply with the summons issued on 15/04/2024". 5. The landlord "has not disproven any of the appellant's claims during the first instance and was ordered to pay compensation and provide repairs". 6. The nature and complexity of the case. 7. The landlord's agent's "lack of professionalism". 8. The landlord "has repeatedly lied about the facts of the case, including directly to the Tribunal member". 9. In the appeal proceedings the landlord did not initially lodge a reply to appeal. When he did eventually lodge his materials following the call-over hearing, the landlord "repeatedly lied about the facts of the case". 10. In his submissions on the appeal the landlord stated that the tenants have been compensated for moving out of the property but the payment referred to was in fact "a settlement sum for pain and suffering following several acts of disability discrimination following an AHRC conciliation". The landlord also "wrongly stated that the Appellants moved out voluntarily". 11. At the hearing of the appeal, the landlord's agent made misrepresentations about the summons which had been issued to the landlord in the first instance proceedings.
2. The majority of these allegations relate to the landlord's conduct in the proceedings below. The tenants have not explained how, and we are not satisfied that, the conduct of the landlord or his agents in the first instance proceedings amounts to special circumstances warranting an award of costs in the appeal.
3. In any event, the submissions and assertions made by the tenants about the landlord's conduct in the proceedings (both at first instance and on appeal) are for the most part vague or speculative, and not supported by cogent evidence or explanation. Insofar as those allegations are relevant to the costs of the appeal, we would make the following additional comments: 1. The fact that the landlord did not lodge a "reply to appeal" on time, does not, without more, amount to special circumstances. The landlord generally complied with the directions of the Appeal Panel and provided detailed submissions and documents in defence of the appeal. The tenants have not identified any prejudice they may have suffered because of the landlord's failure to comply strictly with the procedural timetable made by the Appeal Panel. 2. With regard to the tenants' allegations that the landlord misrepresented to the Appeal Panel the nature of a summons which had been issued to the landlord in the first instance proceedings, the agent, Mr Campion, who is not a lawyer, mistakenly referred to the summons in his oral submissions as a summons to attend the Tribunal and give evidence, rather than as a summons to produce. When we explained this to Mr Campion at the hearing of the appeal, he immediately acknowledged the error. It is not out of the ordinary for parties who are not legally represented or legally trained to make mistakes of this nature. We are not satisfied that Mr Campion deliberately misrepresented the nature of the summons to us. In any event, nothing in the appeal turned on this issue. 3. The tenants have provided no clear evidence in support of their submission that the landlord mischaracterised, in his written submissions on appeal, the nature of a settlement payment which had been made to the tenants. Similarly, the tenants have not explained why the landlord's submission that the tenants had "voluntarily" moved out was incorrect. In any case, nothing in the appeal turned on either of these issues. The tenants have also made other unsubstantiated, generalised allegations about the truthfulness of matters contained in the landlord's written and oral submissions in the appeal. These serious allegations are not particularised. No findings were made by the Appeal Panel regarding the veracity of statements made by the landlord in his submissions to the Appeal Panel. We are not satisfied that the landlord or his agents have deliberately or otherwise been untruthful, or sought to misrepresent matters, when addressing the Appeal Panel. 4. The tenants' assertion that the landlord's conduct "led to" the appeal and to the unreasonable prolonging of the proceedings is unfounded. The appeal was successful, and the matter has been remitted to the Tribunal for reconsideration, because the Appeal Panel was satisfied that the Tribunal below had failed to afford procedural fairness to the tenants and had failed to provide adequate reasons for decision. In our reasons for decision in the appeal we made no findings about the landlord's conduct. The tenants have not pointed to anything which establishes that the landlord has been responsible for unreasonably prolonging the appeal proceedings. 5. The tenants have not explained how the appeal was unusually complex or how such complexity might amount to special circumstances justifying an award of costs in favour of the tenants.
4. We have considered the landlord's submissions in support of his application for costs. It is unclear if the application is in respect of his costs of the appeal or his costs of the first instance proceedings. In any event, the distinction is of no consequence as the landlord was unsuccessful in the appeal and his submissions in support of a costs order do not identify any special circumstances warranting an award of costs in the appeal.
5. For all of these reasons we are not satisfied that there are special circumstances warranting an order for costs in the appeal.

Order

1. We make the following orders: 1. A hearing is dispensed with in accordance with s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW). 2. Time for the appellants to file and serve costs submissions in reply is extended to 18 October 2024. 3. The parties' respective applications for their costs of the appeal are dismissed. 4. Each party is to pay their own costs 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

Amendments 09 December 2024 - Member title updated 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: 09 December 2024