The appellant appealed against orders of the Consumer and Commercial Division of the Tribunal requiring it to pay the respondent Owners Corporation the sum of $71,742.71 in respect of defective building work. By our decision published on 16 November 2020, we allowed the appeal to the extent of reducing the amount the appellant was required to pay to $66,581.51, but otherwise refused leave to appeal and dismissed the appeal: Maygood Australia Pty Ltd v The Owners - Strata Plan No 85338 [2020] NSWCATAP 237.
In that decision orders were made permitting either party to file written submissions in respect of the costs of the appeal within 21 days of the publication of the decision and the other party to respond within 14 days thereafter. The orders required any submissions filed to include submissions as to whether a hearing about costs could be dispensed with and the costs issues determined on the papers.
The respondent filed submissions on 7 December 2020 seeking an order that the appellant pay its costs of and incidental to the appeal. The respondent did not seek that the costs be assessed on other than the ordinary basis. The respondent did not oppose the question of costs being determined on the papers.
The appellant has not filed submissions in response to the respondent's application.
We are satisfied that the issues for determination can be adequately determined in the absence of the parties by considering the written submissions. Accordingly, we will make an order pursuant to s 50 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) dispensing with a hearing.
Section 60 of the NCAT Act 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 or appeal, as well as the costs of or incidental to the application or appeal.
Rules 38 and 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) provide exceptions to the rule laid down in s 60, those rules provide:
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.
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.
The amount in dispute in these proceedings, both at first instance and on appeal, clearly exceeded $30,000. Accordingly, by virtue of rules 38 and 38A we do not need to find that there are special circumstances before making an award of costs in relation to the appeal.
The correct approach to the awarding of costs in cases where rule 38 applies has been considered in many decisions of the Appeal Panel. In Nguyen v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen [2015] NSWCATAP 264 the Appeal Panel held, at [95]:
While the discretion to award costs under rule 38 is unfettered, in our view costs should generally "follow the event", recognising however that factors may exist that militate against the successful party recovering all of its costs: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [134]. Fairness dictates that the unsuccessful party typically bears the liability for costs unless it is demonstrated that some other order is appropriate: Currabubula and Paola v State Bank NSW. Currabubula v State Bank NSW [2000] NSWSC 232. We find no reason to depart from the "usual rule" in this case.
In Thompson v Chapman [2016] NSWCATAP 6 the Appeal Panel stated, at [72]:
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] NSWSCA 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.
In Rockwall Constructions v Nayak (No 2) [2018] NSWCATAP 32, an Appeal Panel stated at [13]:
Where an appeal has been heard and determined on the merits and cl 38A applies, the appropriate starting point for the exercise of the discretion is not that the parties are to pay their own costs. Rather, it 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, subject to exceptions generally involving misconduct on the part of that party: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534; Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72.
Although the appellant in this case was successful to the extent of having the judgment against it reduced by an amount of $5,161, the error in the decision at first instance which led to that adjustment was, as the respondent pointed out in its costs submissions, not disputed by the respondent. In all respects in which the respondent resisted the appeal, the respondent was successful.
In those circumstances we accept the respondent's submission that the respondent has been successful in the appeal and that the application of the usual rule would require that the appellant be ordered to pay the respondent's costs.
There is no reason apparent to us why the usual rule should not apply in this case. We note that the appellant has not availed itself of the opportunity to file submissions and thus apparently does not seek to suggest otherwise.
Our orders are:
1. A hearing in respect of costs is dispensed with.
2. The appellant is to pay the respondent's costs of the appeal as agreed or assessed.
[2]
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
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Decision last updated: 06 May 2021