This decision concerns whether the Respondent should have an order for its costs of the appeal to be paid by the Appellant. The relevant background circumstances are these:
1. On 16 December 2021 the Tribunal, at first instance, published its decision determining the dispute between the parties which involved issues concerning the application of the Retirement Villages Act 1999 (NSW) (the RV Act). The Tribunal made an order that the Respondent at first instance (now the Appellant) take such steps as are necessary to terminate the occupation of the Second Respondent of Lot 33 in the Strata Plan. The Second Respondent has played no part in this appeal.
2. On 11 March 2022, the Appellant lodged a Notice of Appeal and in that notice stated that she had received notice of the decision at first instance on 4 March 2022.
3. On 25 March 2022, the appeal proceedings came before the Appeal Panel for the purposes of call over and directions. The hearing date for the appeal was set for 17 May 2022.
4. On 26 April 2022, the timetable for the lodgement of submissions for and against the appeal was amended.
5. On 5 May 2022, the timetable was further amended.
6. On or prior to 16 May 2022, the Tribunal was advised in writing that the Appellant withdrew the appeal. On 16 May, the Tribunal dismissed the appeal and vacated the hearing on 17 May. The Tribunal also made directions concerning the Respondent's foreshadowed application for costs of the appeal.
7. On 30 May, the Tribunal received the Respondent's submissions in support of an order for costs of the appeal. On 14 June the Tribunal received the Appellant's submissions opposing the proposed order for costs, and on 20 June 2022 the Respondent lodged submissions in reply.
8. The parties consent to the application for costs of the appeal being determined on the papers and we, the Appeal Panel, are satisfied that we may determine the issues in the absence of a hearing. Accordingly, we make an order under s 50 of the Civil & Administrative Tribunal Act 2013 (NSW) (the NCAT Act), dispensing with a hearing.
The Proceedings at First Instance
At first instance, the Respondent brought the application to the Tribunal for the purposes of seeking relief under the RV Act against the Appellant in her capacity as executrix of a deceased estate arising out of the occupancy of Lot 43 in the strata title complex known as Bondi Beach Astra.
The factual background went back to 1999 when the deceased entered into a contract with the Respondent to purchase Lot 43 and also entered into a deed entitled an Occupancy Agreement.
The proceedings at first instance involved questions as to whether the Tribunal had jurisdiction to determine the proceedings and, if so, whether the Respondent had standing to obtain the relief sought. The issues also concerned whether the Appellant breached the RV Act and/or the Occupancy Agreement by permitting a third person to occupy Lot 43.
The decision at first instance went into considerable detail as to whether the Respondent is a retirement village under the RV Act and, if so, whether the Respondent is the operator of that village and, further, whether the Appellant is a resident for the purposes of the RV Act. The Tribunal found that the relationship between the parties was regulated by the RV Act and that the Respondent was entitled to the order sought terminating the occupation of the Second Respondent of Lot 43.
Late Lodgment of Appeal
The Notice of Appeal was lodged almost three months after publication of the decision at first instance. On 25 April 2022 the Appellant lodged submissions in support of the appeal and accompanying those submissions was an affidavit dated 22 April 2022 in which the Appellant deposed that she first became aware of the order at first instance in late February 2022 after she received an email from the strata committee attaching minutes of a meeting of the strata committee held on 8 February 2022, which made reference to an order made having been made by the tribunal for the tenant in Lot 43 to vacate. The affidavit states that the Appellant was not aware until the receipt of this email that the Tribunal had made such an order. The affidavit goes on to describe the efforts that she then undertook which resulted in the lodgment of a Notice of Appeal on 11 March 2022.
We note that there is no evidence from the Respondent contradicting the Appellant's affidavit and therefore her evidence in this respect must be treated as unchallenged. However, nothing turns on this issue so far as determining the Respondent's application for costs.
As indicated above, the Appellant withdrew the appeal on or about 16 May and the Tribunal made an order dismissing the appeal. We have not been provided with any evidence concerning what made the Appellant take the decision to withdraw the appeal.
We now turn to the submissions concerning costs of the appeal.
Respondent's Submissions
The Respondent acknowledges that by s 60(2) of the NCAT Act, the Tribunal may award costs if there are special circumstances warranting an award of costs. The Respondent refers to subsections (a), (c), (e) and (g) of s 60(3) for the purposes of contending that there are special circumstances in this case. Section 60(3) provides as follows:
(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.
The Respondent contends that the Appellant filed an appeal book comprising in excess of 500 pages and only referred to a few select documents and pages in its submissions, thus demonstrating that the Appellant had no clear basis upon which to bring the appeal or to explain the excessive amount of material lodged in support of the appeal.
The Respondent also contends that the appeal was misconceived and lacking in substance on the basis that a large number of the submissions were irrelevant to the questions of law argued by the parties at first instance and the submissions did not address the Appellant's claims against the Respondent concerning the shortcomings identified by the member at first instance in the Appellant's arguments.
The Respondent also contends that the Appellant has disregarded Tribunal deadlines and processes and has sought to appeal against the same issues both in Supreme Court and in the Tribunal. The Respondent contends that the Appellant has had no basis in fact or law to bring any claim in relation to the issues, the subject of these previous proceedings.
The Respondent contends that the Appellant has conducted the appeal in a manner that has disadvantaged the Respondent by presenting voluminous and unnecessary material that was filed late and that the appeal clearly lacked substance and was misconceived.
The Appellant also contends that we should take into account that the Appellant continues to act in contravention of village rules.
The Respondent submits that the Appeal Panel should make an award for costs on an indemnity basis. For reasons which become apparent later, it is not necessary to record the details of these submissions.
Appellant's Submissions
The Appellant contends that the appeal did not lack substance. Rather, there were complex questions of statutory construction of the RV Act and the application of a number of Supreme Court authorities. The mere fact that the appeal was withdrawn before the final hearing occurred is not a sufficient basis for the making of a costs order or an indication that the matter was without merit. The Appellant's conduct could not be described as frivolous or vexatious. The Respondent's contention that there has been continuing contravention by the Appellant is not properly before the Appeal Panel, in that there is no evidence to support the contention. In any event, it is denied.
Respondent's Submissions in Reply
The Respondent submits that it incurred expense in conducting a detailed review of the appeal book which ran for over 500 pages. The appeal was withdrawn on 13 May in circumstances where the Respondent and its representatives had taken significant time to prepare for the hearing.
The Respondent's submissions deal with assertions of continuing contravention which are not of relevance to the determination of this decision.
Consideration
The starting point concerning the issues before us involves a consideration of the principles applicable when the proceedings have come to an end without an adjudication on the merits.
In Re The Minister for Immigration & Ethnic Affairs of the Commonwealth of Australia; ex parte Lai Qin [1997] HCA 6, a decision of McHugh J, his Honour said the following:
"In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule, the successful party is entitled to his or her costs. Success in the action or on issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or not it will make a costs order.
In an appropriate case, a court will make an order for costs, even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the cost of the litigated action which by settlement or extra curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action."
Later in the judgment, his Honour said:
"If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable unto the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings."
The judgment in the Lai Quin case was relied upon by the Appeal Panel in Grasso v The Owners Strata Plan no 52399 [2022] NSWCA 91. That case involved an appeal which was withdrawn by agreement between the parties. At [12] the Appeal Panel summarised the principles concerning an award of costs and in particular the requirement to demonstrate that there are special circumstances warranting an award of costs. At [19] the Appeal Panel stated that it cannot "usefully speculate whether the appeal is likely to have succeeded". The Appeal Panel stated that on the material before it was impossible to conclude that the appeal was hopeless or that the Appellant had capitulated. The Appeal Panel referred to the extract in the Lai Quin case quoted at paragraph 22 above and that it would follow the principle there articulated. The Appeal Panel stated that the appellant's conduct had not occurred in a way that unnecessarily disadvantaged the respondent, had not unreasonably prolonged the time for completion of the proceedings and that the appellant's claim could not be said to be untenable. The Appeal Panel also stated that the proceedings were unusual and complex and further that there was no evidence that the proceedings were frivolous, vexatious or otherwise misconceived or lacking in substance. In the result, the Appeal Panel declined to make an award for costs.
The grounds of appeal in this matter assert that the Tribunal erred in finding that the residential premises were subject to the provisions of the RV Act and further erred in finding that the village rules under that Act applied to the relevant lot (Lot 43). The Notice of Appeal also contended that the Tribunal erred in finding that the land comprised in Lot 43 was used as a "retirement village" within the meaning of the RV Act.
It is clear to us that the decision at first instance involved complex considerations of the statutory construction of the RV Act and its application to the arrangement between the parties which commenced in 1999 and which involved a consideration of whether that arrangement was regulated by the RV Act which became law subsequent to the agreement between the parties.
In this case one of the Respondent's arguments is that the Appellant unnecessarily disadvantaged the Respondent by the lodgment and service of voluminous and largely irrelevant material.
The Appeal Panel would be engaged in an exercise of speculation if we were to decide that the material provided lodged by the Appellant was unnecessarily voluminous and was, as a consequence, disadvantageous to the Respondent. Given the apparent complexity of the issues it is not apparent that the Appellants voluminous material included unnecessary material. Accordingly, we do not accept that the Respondent has demonstrated that there are special circumstances in this case of the kind described in s 60(3)(a).
The Respondent also relied upon s 60(3)(c) and (e) which concern a party that has made a claim having no tenable basis in fact or law or that the proceedings are frivolous, misconceived or lack substance. This submission would require us to undertake the task that McHugh J said should not be undertaken because it would be determining issues that are now hypothetical. Therefore, the submission is rejected.
To the extent that the Appellant relies upon s 60(3)(d) (namely any other matter that the Tribunal considers relevant) we are of the opinion that there are no such relevant matters. The Respondent referred to conduct occurring subsequent to the first instance decision which asserted that the Appellant continued to act in contravention of obligations under the RV Act. That material was contained in submissions and not supported by direct evidence. In addition, it is not relevant to a consideration of whether costs of the appeal should be awarded in favour of the Respondent. A costs order is intended to compensate the Respondent for the expense it has incurred in defending the appeal and is not intended to either punish the Appellant or to provide compensation to the Respondent for dealing with continuing contravening conduct.
For the above reasons, the application for an award for costs is dismissed.
The orders of the Tribunal are as follows:
1. A hearing on the question of whether there should be an order for costs of the appeal is dispensed with.
2. The application for an order for costs of the appeal is dismissed.
[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: 12 July 2022