Morri v Addbuild Master Builders Pty Ltd (No 2)

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.

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.

1. Rules 38 and 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) provide exceptions to the rule laid down in s 60. Neither party suggested that those exceptions were applicable in this case.

1. The respondent accepts that s 60 of the NCAT Act applies. It submits that there are special circumstances in this case and that there should be an order for costs in its favour. The respondent submits that the following matters constitute special circumstances in this case:

"a. the attempted provision and reliance upon "significant new evidence", which goes to ss 60(3)(a), (e) and (f),

b. the rejection of every ground of appeal given that Mr Morri was not able to show how (if at all possible) the decision by the Tribunal to award Addbuild $11,709.30 should be overturned or changed which goes to ss 60(3)(c), (d) and (e)."

1. The respondent submitted, in respect of the "significant new evidence" sought to be introduced and relied upon by the appellant in the appeal:

"10. The evidence would have had no probative value in any event as observed by the Appeal Panel [Primary decision at [95]] ...

11. ... these documents, even if they were to be probative or relevant, could very well have been obtained and provided by Mr Morri before the original hearing and did not need to be an additional imposition upon resource and time in the Appeal Panel. ...

12. The result is that the "last second" attempt to bring in additional evidence disadvantaged Addbuild (s 60(3)(a)), it was a misconceived, frivolous and lacking in substance attempt to somehow impugn Addbuild by impugning Ms Paton (s 60(3)(e)) and had the effect of distracting the parties and the Appeal Panel from the just, quick and cheap resolution of the matters in dispute (s 60(3)(f))."

1. The respondent submitted that the appellant failed to establish every ground of appeal and that the appeal was futile:

"15. The nature of these proceedings was that it was a simple (indeed, successful) attempt by Addbuild to have unpaid invoices paid for work done. It was complicated and overextended by Mr Morri, resulting in significant costs being expended by Addbuild in defending the subsequent appeal: s 60(3)(d). The strength of the proceedings (by Mr Morri) has been demonstrated to be nil (s 60(3)(c)), and at least one submission made by Mr Morri was described to be misconceived: s 60(3)(e)."

1. The appellant submitted that the respondent has not established the existence of special circumstances:

"16. ... the assertion that every ground of appeal was rejected says nothing more than that the appellant's appeal was ultimately unsuccessful. The applicant has not shown why the Tribunal would find that any of s 60(c), (d) or (e) are relevant as asserted.

17. The complaint in relation to the unjustified removal of Mr Kenny from the hearing room was, in fact, made out and, in all the circumstances, was not a frivolous or minor issue ... the appellant clearly had a valid argument arising from the conduct of the matter at first instance.

18. Neither the proceedings as a whole, nor the appeal specifically, were frivolous or vexatious.

19. To the extent that the grounds of appeal were lacking in substance or misconceived, this was very clearly the result of Mr Morri being self-represented...

...

20. There is a particular unfairness in ordering costs against a self-represented appellant in circumstances where a solicitor supporting him at the primary hearing was ejected without proper cause.

21. It has not been shown how the appellant's conduct made the appeal unnecessarily and additionally complex such as to reach the threshold of special circumstances.

22. Neither the nature, complexity nor amount of money at issue in the appeal warranted either party obtaining legal representation.

23. There is no complaint in relation to non-compliance with orders or directions by the appellant.

24. The respondent additionally relies upon the attempt by the appellant to introduce new evidence at the appeal. The material was not voluminous, did not extend the proceeding and was dealt with in short order by the Tribunal. It has not been shown that it justified or contributed to additional legal costs incurred by the respondent. Neither the material nor the arguments arising from it needed to be considered on their merits given that it clearly did not meet the threshold tests for leave. The hearing of the appeal was not delayed, extended nor deferred by this matter. Once again, this course of conduct was clearly symptomatic of Mr Morri being unrepresented."

1. Because s 60 of the NCAT Act applies in this case, I must find special circumstances before I may make an award of costs.
2. "Special circumstances" do not have to be "extraordinary or exceptional", it suffices if they are "out of the ordinary": Cripps v G&M Dawson Pty Ltd [2006] NSWCA 81 at [60].
3. I turn to consider the matters relied upon by the respondent.

Provision and reliance upon "significant new evidence" - ss 60(3)(a), (e) and (f)

1. I do not consider that the new material introduced and relied upon by the appellant unnecessarily disadvantaged the respondent to the extent that the appellant's conduct could constitute special circumstances.
2. The Appeal Panel in FCZ v Illawarra Shoalhaven Local Health District (No 2) [2024] NSWCATAP 53 (FCZ (No 2)) dealt with a similar submission. In that instance, the appellant was late in making an application to adduce fresh evidence and did not serve an application for an order under s 64 of the NCAT Act. The Appeal Panel accepted that the appellant's conduct could be described as "tardy"; however found that it did not amount to "special circumstances", nor were they circumstances "out of the ordinary".
3. The Appeal Panel held at [38]:

"... this is a circumstance which is not out of the ordinary when a party is self-represented and not legally trained. The Appeal Panel regularly faces such a deficiency in the preparation of a self-represented party's appeal. In the absence of the Respondent placing before the Appeal Panel that material, the usual outcome is that the appeal fails because the appellant can not demonstrate error. This is not a "special circumstance".

1. The appellant in this case was not legally represented. He was also not legally trained.
2. The Appeal Panel dealt with the "new evidence" briefly. The appellant's reliance upon it did not prolong the proceedings substantially as the appeal proceeded in a timely manner. The hearing was completed within the usual time allocation.
3. While the evidence could not be said to have been "not reasonably available" at the time of the original hearing, this is not out of the ordinary, particularly where the party seeking to rely upon new evidence is not legally represented. As stated in FCZ (No 2), "[t]he Appeal Panel regularly faces such a deficiency in the preparation of a self-represented party's appeal."
4. I am also not persuaded that the appellant's attempt to introduce and rely upon "new evidence", though without merit, was misconceived, frivolous or lacking in substance. As the Appeal Panel held in FCZ (No 2) at [39]-[40]:

"39 It is correct that we found grounds 5, 6 and 7 to be misconceived. These are factors that could be considered special circumstances to consider in deciding whether to exercise a discretion to make a costs order.

40 However, as to the remainder of the Respondent's argument that the grounds of appeal were not reasonably arguable, we disagree. The appeal could not properly be described as frivolous, vexatious or misconceived in its entirety. It is clear that FCZ genuinely believed there had been an error but she failed to establish any such error. She is not an articulate legal draftsperson, nor should that standard be expected of FCZ. We do not find 'special circumstances' on the basis that the appeal was 'lacking in substance', based on an 'Untenable proposition of fact or law' or that it is otherwise not 'reasonably arguable'".

1. I am also not persuaded that the appellant breached his duty under s 36(3) of the NCAT Act, by seeking to introduce and rely upon new evidence at the appeal.
2. Section 36 of the NCAT Act relevantly provides:

36 Guiding principle to be applied to practice and procedure

(1) The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

...

(3) Each of the following persons is under a duty to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal -

(a) a party to proceedings in the Tribunal, ...

1. As the Appeal Panel held in James v Department of Justice (Corrective Services NSW) (No 2) [2022] NSWCATAP 216 (James (No 2)), at [28], citing DHY v Public Guardian (No 3) [2022] NSWCATAP 34, at [19]:

"28 ... 'the power to award costs is to be exercised with some tolerance for self-represented litigants who do not understand legal concepts.' The fact that the applicant was not represented was not irrelevant to the consideration whether there were special circumstances."

Rejection of the appellant's grounds of appeal - ss 60(3)(c), (d) and (e)

1. To establish that a claim had no tenable basis in fact or law, it is not sufficient that the claim failed.
2. In James (No 2), at [13] - [14], the Appeal Panel addressed a submission to similar effect:

"13 The respondent's submissions in this regard amounted, ultimately, to no more than the proposition that, the appeal having failed, it was thereby shown to have no tenable basis.

14 Section 60 (3) (c) requires more than this. As the Appeal Panel held in DYH v Public Guardian (No 3) [2022] NSWCATAP 34 at [17] - [19]:

'17 The power to award costs in s 60 of the NCAT Act is to be understood in the context of the Act as a whole. One of the objects of the NCAT Act is "to ensure that the Tribunal is accessible and responsive to the needs of all of its users" (NCAT Act, s 3). A large proportion of its users are not legally trained and the general rule (which is modified for the Administrative and Equal Opportunity Division) is that a party has the carriage of the party's own case and is not entitled to be represented by any person, unless the Tribunal grants leave (NCAT Act, s 45(1); Sch 3, cl 9). The Tribunal is also obliged to ensure that the parties understand the nature of the proceedings and, if requested to do so, explain procedural matters to the parties (NCAT Act, s 38(5)).

18 The general rule set out in s 60(1) of the NCAT Act, that each party pay the party's own costs, was "designed to promote access to justice generally and to minimise the overall level of costs in tribunal proceedings as far as is practicable" (Choi v University of Technology Sydney [2020] NSWCATAP 18 at [41], citing Stonnington City Council v Blue Emporium Pty Ltd [2004] VCAT 1441 at [13]). The concern with access to justice, evinced in s 60(1), indicates that the Tribunal should not award costs too readily on the basis that one party's claim was stronger than the other party's claim (see NCAT Act, s 60(3)(c)). The relative strengths of the parties' claims is one factor to be taken into account, but a finding that a party's claim is weak does not necessarily mean that there are special circumstances warranting an award of costs (see Choi v University of Technology Sydney [2020] NSWCATAP 18 at [45]).

19 In this context, we consider that the power to award costs is to be exercised with some tolerance for self-represented litigants who do not understand legal concepts. That includes a lack of understanding of the rules governing the admission of fresh evidence and the question of what constitutes error for the purposes of an appeal. That approach is consistent with the principle that the discretion to award costs is to be exercised judicially "having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs" (Feng v OzWood (Australia) Pty Ltd [2020] NSWCATAP 42 at [8]).'"

1. The fact that the appeal has failed equally does not establish that it was misconceived or lacking in substance. As the Appeal Panel held in James (No 2) at [24] - [26]:

"24 In Zucker v Burbank Montague Pty Ltd [2018] NSWCATAP 135 at [44] the Appeal Panel held that:

'44 A finding that a claim is "not proved on the balance of probabilities" is not the same as a finding that a claim is "not tenable in fact or law". They are different concepts. The expression "no tenable basis in fact or law" relates to the common law tests developed and applied in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 and General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125. For a claim to have no tenable basis in fact or law it must be so obviously untenable that it cannot possibly succeed: General Steel at 130. "Manifestly groundless" or "clearly untenable" are equivalent expressions. In our view, for the purpose of s 60(3)(c), it matters not whether a conclusion that a claim has no tenable basis in fact or law is reached in connection with an application for summary dismissal or after a full hearing on the merits.'

25 In that case, at [50], the Appeal Panel adopted the statement of Ipp JA in The Owners Corporation of Strata Plan 4521 v Zouk & Anor [2007] NSWCA 231 at [45] that 'lacking in substance' means '"not reasonably arguable". That is, a meaning not dissimilar to "frivolous, vexatious, misconceived"'.

26 We do not consider that the appeal could properly be described as frivolous, vexatious, misconceived or lacking in substance in the sense outlined by the Appeal Panel in Zucker v Burbank Montague Pty Ltd. The grounds of appeal were not established, and it may fairly be said that the appeal had weak prospects of success. However, as the Appeal Panel stated in DYH v Public Guardian (No 3) [2022] NSWCATAP 34, at [18], the concern with access to justice evinced in s 60 (1) indicates that the Tribunal should not award costs too readily on the basis that one party's claim was stronger than the other party's claim, and a finding that a party's claim is weak does not necessarily mean that there are special circumstances warranting an award of costs."

1. I am not persuaded that the appeal had no tenable basis in fact or law or was entirely misconceived or lacking in substance.
2. The Appeal Panel did find that the appellant's submissions with respect to grounds 3 and 4 were misconceived. However, as the appellant pointed out in his submissions on costs, the Appeal Panel found that the Tribunal had made an error of law in requiring Mr Kenny to leave the room. The appeal failed because we determined that that error was not material to the ultimate determination of the Tribunal.
3. I reject the respondent's submission that, by bringing the appeal, the appellant complicated and overextended the proceedings.
4. A party is permitted to appeal in respect of a final decision of the Tribunal as of right "on any question of law" or by leave of the Appeal on any other grounds: s 80(2) of the NCAT Act. As such, it was open to the appellant to pursue an appeal against the decision. The Appeal Panel was able to deal with the matters brought to its attention by the parties. The hearing was completed within the allotted time. No further submissions were necessary. It cannot be said that the appeal complicated or overextended the proceedings.

1. Accordingly, I am not persuaded that there were special circumstances warranting an award of costs in relation to the appeal, and the respondent's application for costs is dismissed.

(1) Pursuant to s 50 of the Civil and Administrative Tribunal Act 2013 (NSW) a hearing on the question of costs is dispensed with.

(2) The respondent's application for costs is dismissed.

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.