Mirvac North Sydney Office Holdings Pty Limited v The Australian Industry Group

NCAT Appeal Panel|2022-07-15

REASONS FOR DECISION

The First Respondent, The Australian Industry Group applies for costs of an application for a separate question and costs of the appeal from the decision of that separate question.
There is some history to the proceedings which needs to be set out to understand the context of the First Respondent's application for costs.
By application filed on 31 December 2019, the Appellant, Mirvac North Sydney Office Holdings Pty Limited, sought orders under s 236 Strata Schemes Management Act 2015 (the Act) allocating unit entitlements.
On 29 January 2020, the Appellant was ordered to file and serve its evidence in reply by 25 March 2020. On 19 March 2020, the Appellant requested the Tribunal consider vacating that order. The First Respondent did not consent to that request. There is no evidence that the Tribunal vacated the order. The Appellant did not comply with that order.
On 11 February 2020, the Appellant filed an application for a separate question to be determined.
On 30 March 2020, the Tribunal held a hearing on the separate question to determine the relevant valuation date under s 236(1) of the Act.
On 18 June 2020, the Tribunal determined the question in favour of the First Respondent. The Tribunal set a timetable for the filing of submissions on the question of costs, which concluded on 3 July 2020.
Submissions were made by the First Respondent supported by an Affidavit of Matthew Jenkins affirmed on 26 June 2020 in relation to costs.
No submissions were made by the Appellant in the timetable set.
The Appellant filed a Notice of Appeal on 16 July 2020.
An application for a stay by the Appellant, was dismissed on 28 July 2020 by the Appeal Panel. The Appeal Panel ordered that the costs of the First Respondent in that stay application were to be costs in the Appeal.
On 16 December 2021, the Appellant was successful in the substantive proceedings between the parties as to the allocation of unit entitlements under s 236(1) of the Act.

Power to award costs

The power of the Tribunal to award costs to a party is conferred by s 60 of the Civil and Administrative Tribunal Act 2013. The starting point is that each party to proceedings in the Tribunal is to pay its or their own costs: s 60(1). If it is to award costs, the Tribunal is required to find that there are special circumstances which warrant the award of costs: s 60(2). By reason of s 60(3) of the Act, the Tribunal is to have regard to the following matters (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.
In eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94, the Appeal Panel considered the meaning of 'special circumstances' The authorities considering the meaning of the expression "special circumstances" were recently reviewed in CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [23]-[31]. From those authorities, it can be seen that "special circumstances" are circumstances that are out of the ordinary, they do not have to be extraordinary or exceptional. Further, the discretion to award costs must be exercised judicially and having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs. Each situation must, of course, be assessed on a case by case basis to see whether or not special circumstances exist so as to warrant the award of costs.
In Alexander James Pty Ltd v Pozetu Pty Ltd (No. 2) [2016] NSWCATAP 75 at [14], the Appeal Panel stated An assessment whether circumstances are "special" involves the exercise of a value judgement carried out by way of comparison between what is not "special", and what is special. There are no scientific means by which the former can be ascertained. The evaluative process is necessarily one of impression informed by the particular provisions of section 60, which by sec 60(3)(f) incorporates also a consideration of section 36(3) of the Act.

First Respondent's submissions

The First Respondent seeks the costs of the appeal and of the Separate Question Application on the basis that there are special circumstances warranting the award of costs under s 60.
As to the question of costs on the Separate Question, the First Respondent relies on an Affidavit of Matthew Jenkins affirmed on 26 June 2020 which sets out correspondence between the parties before the hearing on 30 March 2020.
First, the First Respondent submits that it is ordinarily appropriative that all issues in a proceeding should be disposed of at the same time and cited, among others, The Trust Company Ltd v Diamond Certification laboratory of Australia Pty Ltd [2015] NSWCATAP 257 at 48.
Thus, is logically out of the ordinary for the Appellant to have applied for a separate question be determined before the substantive hearing.
A consequence of that application was that the substantive hearing could not proceed until the question was determined. That led to delay and the First Respondent was unnecessarily disadvantaged under s 60(3)(a) and (b).
Secondly, the Appellant did not comply with the substantive orders of the Tribunal for the service of evidence, significantly delaying the preparation of the proceedings.
Thirdly, after the hearing and before the decision, the Appellant made an offer that if the First Respondent agreed to consent orders dismissing its application for summary dismissal, the Appellant would not seek costs of that application. The First Respondent replied that should it be successful on its application; it would rely on correspondence between the parties on the question of costs.
The First Respondent submits that the offer by the Appellant is consistent with the Appellant considering that special circumstances existed should the Appellant be successful.
Fourthly, as to s 60(3)(c), the First Respondent submits the decision of the Tribunal on the separate question supports that the First Respondent's interpretation of the section was correct.
As to the question of costs of the Appeal, the First Respondent submits that the appeal having been withdrawn at the Appellant's request is sufficient to ground a finding of special circumstances: 'it was wholly unnecessary'.
The First Respondent submits that the fact that the Appellant was successful in the substantive proceedings is not a determining factor. That 'cannot alter the fact that the Separate Question Application failed and the Appeal from it was entirely arid'. Further, those interlocutory steps unnecessarily delayed the substantive proceedings.
Finally, the First Respondent submits that the processes by the Appellant did not aid the just, quick and cheap resolution of the real issues in the proceedings contrary to s 36 Civil and Administrative Tribunal Act 2013.

The Appellant's submissions

The Appellant submits that no special circumstances exist warranting the award of costs.
The Appellant submits that it appropriately withdrew the appeal because of the outcome of the substantive hearing.
In relation to costs of the separate question, the Appellant submits that the question was discrete and went to the jurisdiction of the Tribunal and as such was not of itself out of the ordinary. The Appellant, properly, acknowledged that the 'default position in all Courts and Tribunals from a procedural perspective is that all issues in the proceedings should be disposed of at the one-time'.
The Appellant submits that an answer in its favour would have been dispositive of the proceedings in its favour and significant costs would have been incurred by it in the preparation of the evidence required in the substantive proceedings.
Further, the substantive hearing would have been longer if the separate question had not been heard first.
The Appellant submits that because of COVID-19 the proceedings were likely to be adjourned and thus there was no unreasonable prolonging of the proceedings or disadvantage to the First Respondent.
The Appellant raises an additional matter. The Appellant submits that the orders made by the Tribunal in respect of the hearing of the separate question 'incorrectly identify the application the Tribunal as an application for summary dismissal. Applications for summary dismissal are made under s 55 of the Civil and Administrative Tribunal Act 2013 Act. Rather this was an application for determination of a separate question which is acknowledged at [4] of the Tribunal judgement and was made under s 38(1) of the Civil and Administrative Tribunal Act 2013 Act.'
The Appellant seeks correction of Order 1 under s 63 of the Civil and Administrative Tribunal Act 2013 Act.

Consideration

Having considered the helpful submissions of the parties and s 60 of the Act, we are of the view that no special circumstances exist so as to warrant an award of costs, in particular that there was nothing out of the ordinary in the way the proceedings were conducted by the Appellant.
The First Respondent's contend that there exist circumstances which are out of the ordinary in that the Appellant prolonged unreasonably the proceedings (s 60(3)(b) which necessarily disadvantaged the First Respondent (s 60(3)(a)) and that the First Respondent was successful in relation to the Separate Question (s 60(3)(c)).
We are not of the view that the Appellant prolonged unreasonably the proceedings. The Appellant was entitled to apply for a separate question to be determined before the substantive hearing. The reason given by the Appellant is that had that decision been in its favour it would have saved the Appellant expending considerable funds in preparing for the hearing. That is not an unreasonable proposition although it undoubtedly prolonged the proceedings.
There is no evidence before us as to the particular disadvantage to the First Respondent occasioned by what is contended to be the conduct of the Appellant in prolonging unreasonably the proceedings.
While the First Respondent was successful in that the Tribunal agreed with its interpretation of the relevant section, that alone does indicate that the Appellant's application had no tenable basis or the strength of its claim was so weak as to ground an award of costs in special circumstances.
Similarly, the Appellant was entitled to appeal the decision of the Tribunal in respect of the separate question which, again, while prolonging the proceedings was not unreasonable. On the evidence before us, it is not clear when the Appellant filed and served its evidence concerning the substantive appeal and the nature of the disadvantage occasioned to the First Respondent by that timing.
The withdrawal of the appeal followed the success by the Appellant in the substantive proceedings. In our view that is not out of the ordinary.
We conclude there is nothing out of the ordinary in the conduct of the Appellant.

Additional matter

The power to correct errors in decisions of Tribunal is set out in s 63 of Civil and Administrative Tribunal Act 2013 Act. (1) If, after the making of a decision by the Tribunal, the President or the member who presided at the proceedings is satisfied that there is an obvious error in the text of a notice of the decision or a written statement of reasons for the decision, he or she may direct a registrar to alter the text of the notice or statement in accordance with the directions of the President or the member. (2) If the text of a notice or statement is so altered, the altered text is taken to be the notice of the Tribunal's decision or the statement of its reasons, as the case may be, and notice of the alteration is to be given to the parties in the proceedings in such manner as the President or member may direct. (3) Examples of obvious errors in the text of a notice of a decision or a statement of reasons for a decision are where - (a) there is an obvious clerical or typographical error in the text of the notice or statement, or (b) there is an error arising from an accidental slip or omission, or (c) there is a defect of form, or (d) there is an inconsistency between the stated decision and the stated reasons.
Section 81 provides … (2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when confirming, affirming or varying, or making a decision in substitution for, the decision under appeal and may exercise such functions on grounds other than those relied upon at first instance.
We are satisfied that there is an error in the cover sheet of the decision of S Thode in that Order 1 'that the application for summary dismissal is refused' is not consistent with the text of the decision. At [4] of the decision, the Tribunal states that the matter was set down for hearing a separate question. The Tribunal determined that question in its decision.

ORDERS 1. The application for costs is dismissed. 2. Under s 63 of the Civil and Administrative Tribunal Act 2013 (NSW), the Registrar is directed to alter the cover sheet of the decision under appeal dated 18 June 2020 by deleting order number 1 and replacing it with 'as set out paragraph [36] of the reasons for decision'.

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 15 July 2022 - No Amendment 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: 15 July 2022

At a glance

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Judgment (9 paragraphs)

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Legislation Cited (1)

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Cited By (1)