In a decision dated 31 May 2021 in these proceedings (Mikhail v JJ Built This Pty Ltd [2021] NSWCATAP 159) we ordered the appeal brought by the appellant from the decision of the Tribunal in proceedings HB 20/23978 be dismissed, and the appeal brought by the appellant against the decision of the Tribunal in proceedings HB 20/309824 be upheld. Those two proceedings were heard together by the Tribunal and a single set of reasons given.
In our decision we included directions for the filing of any application for, and submissions on, costs.
An application for costs of the appeal has been made by the respondent and submissions in support of that application were filed by the respondent and dated 17 May 2021, whilst our decision was reserved and before it was published. No submissions in opposition to that application have since been received from the appellant. Nor has any application for costs been received from the appellant.
This decision concerns the respondent's application for costs and assumes familiarity with our decision in the substantive appeals.
We are satisfied that we should make an order dispensing with a hearing on the costs issues as we are satisfied that the issues for determination can be adequately determined in the absence of the parties by considering the written submissions provided.
The respondent correctly submitted that s 60 of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act) provides that each party to proceedings in the Tribunal is to pay the party's own costs, but the Tribunal (which includes the Appeal Panel) may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs.
The respondent also correctly submitted that r 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) provides that despite s 60 of the NCAT Act, the Tribunal may award costs in proceedings to which r 38 applies even in the absence of special circumstances warranting such an award if:
1. 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 NCAT Act in relation to the proceedings, or
2. the amount claimed or in dispute in the proceedings is more than $30,000.
The respondent did not say whether, in its submission, r 38 applied in this case.
We shall briefly describe the respondent's submissions. Their content should be understood in light of the fact they were made before we gave our decision. No further submissions were filed by the respondent and so we need to consider those that were filed.
The respondent submitted that the appellant's grounds of appeal were ambiguous. It submitted that it appeared that the appellant sought to advance at least two grounds on appeal, the first being an issue relating to a deposit paid and the second being the alleged abandonment of the contract by the respondent. The respondent submitted that the appellant had clearly not discharged his onus of proving either an error as to law or fact.
The respondent submitted that the appellant had failed to meet the test in Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69. What test was not identified, but we assume the respondent meant that the appellant had failed to establish an error of law.
The respondent submitted that the appeals were frivolous and vexatious. How that was so was not explained.
The respondent submitted that the appellant had conducted the proceedings in a way that unnecessarily disadvantaged the respondent by the incurring of further legal costs and delaying the respondent's entitlement to enforce the original orders obtained from the Tribunal. Other than bringing the appeals, which was the appellant's right, the respondent did not identify in what way the appellant was said to have conducted the proceedings in a way that unnecessarily disadvantaged the respondent.
The respondent submitted that in its original decision the Tribunal found that the appellant had failed to discharge his burden of proof. It submitted that the evidence relied upon by the appellant was largely improbable considering the objective factual circumstances and was deficient and incapable of supporting the allegations made by him. The respondent submitted that that position had not changed in the appeal.
[2]
Decision
In our opinion each party should pay his and its own costs of each appeal.
First, we consider that there is but one proceeding on the appeal, notwithstanding there were two proceedings before the Tribunal. The circumstances here are different to those considered in Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 where there had been one Notice of Appeal filed in relation to five different decisions of the Tribunal. In this case each of the parties commenced a proceeding in the Tribunal against the other party, each concerned disputes arising out of the same building contract, and the proceedings were heard together. The parties in each proceeding were the same.
Second, the amount in dispute on the appeal was greater than $30,000. That was because the appellant had been ordered to pay the respondent the sum of $49,855.24 and, on the appeal, he argued he should not have to pay the respondent anything.
Therefore, s 60 of the NCAT Act does not apply to the costs of the appeal - Allen at [26].
The relevant principles therefor to apply were succinctly described in Thompson v Chapman [2016] NSWCATAP 6. In that decision the Appeal Panel said:
"69. The starting point in exercising such discretion is that the "usual order for costs" is that a successful party should be entitled to an order for costs in their favour: see Latoudis v Casey [1990] 170 CLR 534 per Mason CJ at 554 and Oshlack v Richmond River Council per McHugh J at 97.
70. The reason for such an order is that it is appropriate for the party who incurred costs caused by the other party in litigation to be reimbursed. Further, an award of costs is by way of an indemnity to the successful party and not as punishment of the unsuccessful party: see Latoudis v Casey per Mason CJ at 543 and McHugh J at 567 and in Oshlack v Richmond River Council per Brennan CJ at 75.
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 nor is there any rule that a successful party might not be ordered to bear the costs of an unsuccessful party: see Oshlack v Richmond River Council per Gaudron and Gummow JJ at 88 and Kirby J at 121 - 123.
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.
73. An example of such an exception was the case of Dee-Tech, a claim for relief against forfeiture. In that case the Court determined that the entitlement of the lessee (Dee-Tech) to exercise an option for renewal required the favourable exercise of a discretion under s 133(F) of the Conveyancing Act 1919. In that case, White J said at [69]:
'The fact that Dee-Tech was in breach of the lease and was not entitled to exercise its option of renewal except for a favourable exercise of discretion under s 133F, is a reason why costs need not follow the event. On the other hand, the fact I found it entitled to conditional relief against forfeiture is a reason why it should have at least a proportion of its costs, reflecting the extent to which costs were increased by Needam Holdings' resistance to its claim.'
74. However, as White J made clear in Dee-Tech, these are but some of the factors which need to be considered and weighed against each other in determining what order for costs should be made. Other factors considered by White J included whether or not the resistance of Neddam Holdings "went beyond what was reasonable" and pursued issues unsuccessfully and that Neddam was not successful on the predominate issues litigated: per White J at [70] - [71]. Further, the case of Dee-Tech is an example of those cases referred to in Oshlack where, by reason of the nature of the relief sought, it is appropriate for a claimant to pay the costs of the respondent at least up until the stage where the conduct of the respondent and/or issue put into dispute make it just and reasonable for the respondent to pay the successful applicant's costs.
75. That is not to say that, in all circumstances, an applicant who first requires an order in their favour in order to obtain the relief sought should be deprived of the whole or even part of their costs of the proceedings. Each case must be determined on its own facts and where the parties may, without order of a Court or Tribunal, agree to resolve all issues between themselves prior to the commencement of any proceedings, this is also a matter which needs to be considered in determining the proper exercise of any discretion in connection with the award of costs.
76. In short, the proper exercise of the discretion requires the Tribunal to do justice between the parties and to exercise the discretion having regard to relevant considerations and in a manner which is not arbitrary or capricious: see Oshlack v Richmond River Council per Gaudron and Gummow JJ at [22] and McHugh J at 65."
Both parties were successful in part on the appeal.
The respondent succeeded in relation to the appeal brought against the decision of the Tribunal in proceedings HB 20/23978, and the appellant succeeded in the appeal brought against the decision of the Tribunal in proceedings HB 20/309824.
Therefore, as a starting point, the usual order that the successful party should be entitled to costs cancels itself out.
None of the reasons advanced by the respondent persuade us that there should be some different order to the one we propose.
Whether the appellant's grounds of appeal were ambiguous or not, his appeal succeeded in relation to the decision in proceedings HB 20/309824. The basis upon which that appeal succeeded did involve an error of law, contrary to the respondent's submission.
The appellant's appeal against the decision in proceedings HB 20/23978 was weak, it must be conceded, but not so weak as to be described as frivolous and vexatious. And, of course, the appellant succeeded in relation to the decision in proceedings HB 20/309824.
Nor are we persuaded that that the appellant had conducted the appeal in a way that unnecessarily disadvantaged the respondent by the incurring of further legal costs and delaying the respondent's entitlement to enforce the original orders obtained from the Tribunal. The respondent did not identify how that was said to have occurred and it is not otherwise apparent to us.
Therefore, we are not persuaded that there was any disentitling or other conduct of the appellant which persuades us, in the exercise of our discretion, to make any order other than each party is to pay his and its own costs of the appeal.
[3]
Orders
Accordingly, we make the following order:
1. A hearing on costs is dispensed with.
2. Each party is to pay his and its own costs of the appeal.
[4]
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: 14 July 2021