Murphy v Trustees Catholic Aged Care Sydney

First preliminary issue - dispensing with a hearing

1. Consistent with the Tribunal's usual practice, when we gave directions as to costs, we indicated that, subject to hearing from the parties, we may dispense with a hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) and may decide the matter "on the papers".
2. In its written submissions, the respondent expressly consented to a hearing being dispensed with. However, Mr Murphy opposed this course. He submitted that the respondent's application for costs should take place "in open court so that the press may cover the hearing and the general public and politicians be made aware of how justice is carried out in NCAT proceedings".
3. In addition, Mr Murphy submitted that the respondent only be permitted to make submissions in reply at such a hearing. On this later point, we did not accept Mr Murphy's submission. It is of assistance to the Appeal Panel, and we would have thought to Mr Murphy himself, to know in advance of any hearing the scope of the respondent's submissions.
4. In its submissions in reply, the respondent submitted that the proceedings did not contain matters of public interest as contended by Mr Murphy. It submitted that as both parties had provided detailed submissions on costs, and as the respondent had nothing further to raise than what was contained in its written submissions, the issue of costs could be determined on the basis of the written submissions. Otherwise the respondent left the decision on this issue in the hands of the Appeal Panel.
5. We think that this decision as to costs should be made "on the papers" and without a hearing. While s 49 of the NCAT Act provides that hearings are to be open to the public unless the Tribunal orders otherwise, s 50(2) relevantly provides that the Tribunal may make an order dispensing with a hearing if it is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Tribunal.
6. The guiding principle of the NCAT 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: NCAT Act, s 36(1). In addition, the practice and procedure of the Tribunal is to be implemented so as to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings: NCAT Act, s 36(2). Furthermore, the practice and procedure of the Tribunal should be implemented so as to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings: NCAT Act, 36(4): see Kurmond Homes Pty Ltd v Spiteri [2015] NSWCATAP 48.
7. The Tribunal has routinely considered applications for costs on the papers and without a hearing. We do not think it to be consistent with the guiding principle to have a further hearing in relation to costs. A further hearing would unnecessarily increase the costs of conducting the appeal. This would add further delay and further expense to what has already occurred. We consider it consistent with the guiding principles to determine the issue of costs on the papers.
8. For these reasons, we have decided to dispense with a hearing on costs.

Second preliminary issue - which costs rule applies?

1. The next issue is to determine the appropriate costs rule to apply.
2. Section 60 of the NCAT Act relevantly provides that: 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.
3. However, the effect of rule 38A of the NCAT Rules is that, despite s 60, the Appeal Panel must apply the first instance costs provisions when deciding whether to award costs in relation to an internal appeal. The first instance costs provision is found in r 38. Rule 38 relevantly provides: 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: . . . (b) the amount claimed or in dispute in the proceedings is more than $30,000.
4. The meaning of the phrase "the amount claimed or in dispute in the proceedings is more than $30,000" has been considered in a number of cases. In Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25, the Appeal Panel observed that: 1. the determinative factor was the amount in dispute in the appeal or the value of the matter at issue in the proceedings; 2. the inclusion of the words "or in dispute" after "the amount claimed" in r 38 indicates that amounts may be in dispute in proceedings even if there is not a specific claim for an order for payment of an amount in the proceedings; and 3. whether "the amount in dispute" in an appeal is more than $30,000 depends on whether there is a realistic prospect that in the appeal the wealth of the appellants would be changed by more than $30,000.00.
5. This issue was further considered by the Appeal Panel in The Owners Corporation Strata Plan No. 63341 v Malachite Holdings Pty Ltd [2018] NSWCATAP 256. There the Appeal Panel considered whether r 38(2)(b) applied in circumstances where no amount was claimed in the proceedings for more than $30,000. The Appeal Panel observed at [95] that: 1. where there is a claim for relief that may, as a consequence of that relief being granted, result in the loss of a property or other civil right to a value greater than $30,000, it could not be said that there are proceedings in which the amount claimed or the amount in dispute is greater than $30,000 within the meaning of the rule; 2. the fact that it was necessary to evaluate evidence about the value of particular property or determine other rights as part of determining whether there is an entitlement to relief does not mean "the amount claimed" or "the amount in dispute" in the proceedings is more than $30,000; 3. where the relief sought is not dependent on a finding that a particular amount is payable or not payable, it could not be said that "the amount claimed or in dispute in the proceedings is more than $30,000".
6. The Appeal Panel concluded at [99] that r 38(2)(b): 1. operates when "the amount claimed or in dispute" can be identified in the proceedings; 2. does not require an exercise in the valuation of the right being affected by the order sought in order to determine whether the costs rule applies or to engage in some collateral evaluative process; 3. does not operate because a party raises an issue in proceedings that might be capable of being assigned a monetary value or which might involve the assessment of value as part of determining the relief which is claimed.
7. Relevantly, the Appeal Panel concluded at [111]: Rule 38(2)(b) does not apply to proceedings: (1) Where a claim for relief in the proceedings (not being a claim for an order to be paid or be relieved from paying a specific sum) may, as a consequence of that relief being granted, result in the loss of any property or other civil right to a value of more than $30,000; or (2) Where there is a matter at issue amounting to or of a value of more than $30,000 but: (a) no direct relief is sought and no order could be made in the proceedings requiring payment or relief from payment of an amount more than $30,000; or (b) the relief sought does not depend on there being a finding that a specific amount of money is owed.
8. The respondent's primary submission is that this is a matter where r 38 applies. The respondent submits that it is clear that the amount claimed by Mr Murphy was in excess of $30,000.00, given Mr Murphy was seeking: 1. repayment of an amount of $1,600.00 allegedly not repaid pursuant to previous orders of the Tribunal; 2. repayment of an alleged operating deficit of $23,960.00 for the 2013-2014 year; and 3. the value of the fountain replacement order sought. The Respondent submits that as it had already spent $12,000.00 on the item, it can be reasonably inferred a similar amount would have been required to be spent should the order sought have been granted).
9. Mr Murphy disagrees. In his brief submissions on this point, he submits that there is "no way" the Tribunal should accept the analysis of the amounts claimed.
10. We do not accept that Mr Murphy's appeal can be characterised in the fashion sought by the respondent. As we noted in the Decision, it was quite unclear what Mr Murphy's grounds of appeal actually were. We do not agree that, properly construed, Mr Murphy was seeking those amounts as claimed by the respondent. We consider that these matters all fall within what was described in Malachite at [111] as "a claim for relief in the proceedings (not being a claim for an order to be paid or be relieved from paying a specific sum) [which] may, as a consequence of that relief being granted, result in the loss of any property or other civil right to a value of more than $30,000".
11. Accordingly, in our view, the question of costs is governed by s 60 of the NCAT Act.

Principles to be applied

1. The Appeal Panel has often stated that "special circumstances" are circumstances that are out of the ordinary, they do not have to be extraordinary or exceptional: Mergerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]. In addition, each case depends upon on its own particular facts: Gizah Pty Limited v AXA Trustees Limited (No. 2) [2001] NSWADT 164, and will depend on the circumstances of the individual case: Brunsprop Pty Ltd v Joanne Hay & Wes Davies [2015] NSWCATAP 152.
2. The respondent submits there are special circumstances established by reason of the following.
3. First, the untenable basis in law and in fact of the grounds of appeal: NCAT Act, 60(3)(c). The respondent submits that this is demonstrated in the "comprehensive rejection" of each of the grounds in the Decision. Mr Murphy describes this as an "absurd" claim, by reason of the matter having been before the Tribunal for some four years.
4. Mr Murphy's grounds of appeal appeared in his over 60 pages of submissions. While Mr Murphy did identify arguable errors of law, namely the misapplication by the Tribunal of ss 120C and 128 and of the Retirement Villages Act 1999 (NSW), we found the other grounds of appeal to be misconceived, or lacking in substance.
5. We find that the weakness of the grounds of appeal favour a finding of special circumstances.
6. Secondly, the nature and complexity of the proceedings, resulting in the necessity to obtain legal representation: NCAT Act, 60(3)(d). We do not accept that the fact of legal representation, of itself, warrants a finding of special circumstances. Nor, in this case, does it add significant weight. This factor does not favour a finding of special circumstances.
7. Thirdly, the proceedings being frivolous or vexatious or otherwise misconceived or lacking in substance: NCAT Act, 60(3)(e). Here again the respondent relies on various findings in the Decision. Mr Murphy submits that: The reasons of this Appeal Panel are replete with references to a few of the submissions made by the Appellant being misconceived and lacking in substance. It was a pity that this was not found at the previous hearings including the previous Appeal Panel under the Deputy-President.
8. Mr Murphy confuses what happened in other proceedings with what happened in this appeal. This appeal only dealt with the matters which Mr Murphy himself raised in his Notice of Appeal and submissions. We find that the lack of substance of the grounds of appeal favours a finding of special circumstances.
9. Fourthly, we may consider any other matter that we consider relevant: NCAT 60(3)(g). Here the respondent refers to Mr Murphy being entirely unsuccessful, in circumstances where the matters the subject of the appeal had been considered by the Tribunal and Appeal Panel on five occasions. The respondent submits that the issue of Mr Murphy not articulating with any precision orders sought, or grounds of appeal, is not new and has been an issue at each stage of the proceedings.
10. Mr Murphy submits that he did obtain orders in other hearings, and that he produced what he was required to produce to the best of his ability. He submits that deficiencies in his Notice of Appeal were never "defined to the self-represented appellant". This submission overlooks that we carefully and repeatedly during the appeal hearing asked Mr Murphy to explain his grounds of appeal, and allowed him the opportunity to file additional submissions after the hearing concluded.
11. In addition, as we noted in the Decision, there was considerable justification in the respondent's observations that Mr Murphy's grounds of appeal took the form of a commentary on aspects of the decision of the Tribunal, and lacked precision.
12. These matters favours a finding of special circumstances.
13. In summary, we do not accept that the fact of being granted leave to be legally represented, of itself establishes special circumstances. However, when the other matters are considered cumulatively, we find that the respondent has established special circumstances allowing an award of costs.
14. Where special circumstances are found to exist, the Tribunal has a discretion to exercise in deciding what, if any, order should be made. Relevant to the exercise of that discretion are those facts upon which the finding of special circumstances was based.
15. In our view, the overall weakness of the grounds of the appeal and the lack of precision in Mr Murphy's written submissions warrant an award of costs

Should the respondent be awarded costs on the indemnity basis?

1. The respondent further seeks an award of costs on the indemnity basis.
2. The basis of the respondent's application for indemnity costs was essentially that the appeal had no chance of success (Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No 2) [2009] NSWCA 12 at [4]), and was so weak as to be futile: Hillebrand v Penrith Council [2000] NSWSC 1058. In particular, the respondent relies on the following passage of the Appeal Panel in O'Neill v Community Association DP 270158 [2018] NSWCATAP 272 at [40]: In the case of the costs of the appeal, we are of the view that the special circumstances justify the award of costs on an indemnity basis even without sighting the material in Ex AP5. The appellant did not identify an error of law or the criteria for leave in respect of any errors of fact, or with any precision the alleged errors of fact, in the appeal grounds or when permitted to do so in argument. The absence in the appeal of matters fundamental to any hope of success (as we have identified above), together with the absence of an application to re-open also identified above, made this appeal doomed to fail and untenable, justifying an award of indemnity costs for the entirety of the costs of the appeal. No attempt was made to address these matters when they were pointed out in the reply to the appeal.
3. We are not satisfied that it is appropriate that Mr Murphy should pay costs on the indemnity basis. It is true that overall the grounds of appeal were weak, but we identified two arguable questions of law raised by Mr Murphy. In addition, we do not understand that Mr Murphy was on any notice that in the event the appeal was dismissed, an indemnity costs order would be sought.
4. We decline to make a costs order on the indemnity basis.

Gross costs order

1. If costs are to be awarded by the Tribunal, the Tribunal may determine by whom and to what extent costs are to be paid, and the basis on which the costs are to be assessed: NCAT Act, s 60(4).
2. In order to avoid further costs, the Tribunal has frequently made gross costs or lump sum orders: see for instance Kurmond Homes.
3. In Mison v Bennett Property (NSW) Pty Ltd [2018] NSWCATAP 138 the Appeal Panel stated: 38. A gross sum costs order can only be made in circumstances where a Court or Tribunal can be confident that the approach taken to estimate costs is logical, fair and reasonable: Beach Petroleum NL v Johnson (1995) 57 FCR 119 at [16]. In this context, the concept of "fairness" includes the Court or Tribunal having sufficient confidence in arriving at an appropriate sum on the materials available: Harrison v Schipp [2002] NSWCA 213; (2002) 54 NSWLR 738, per Giles JA at [22]. 39. The appellants' solicitor has provided a number of invoices. Although some of these invoices relate to work apparently undertaken in respect of the proceedings before the Tribunal, it is possible to determine what costs were invoiced in respect of the appeal proceedings. However, no evidence has been provided concerning such matters as the number of hours invoiced or the rate at which work was charged. Nor has evidence been provided concerning which of the amounts charged would properly constitute party/party as opposed to solicitor/client costs, or the appropriateness or otherwise of a discount being applied to the invoiced costs. 40. In these circumstances, we are not satisfied that the costs should be awarded as a gross sum. Rather, we order that costs be paid as agreed or assessed. We have made that order accordingly.
4. Here the respondent has not provided any invoices or other evidence, although it says that the invoices can be provided to the appellant. In the absence of that material, we are not persuaded that it is appropriate to make the gross costs order sought.

Order

1. For the above reasons, we make the following orders: 1. A hearing on the issue of costs is dispensed with. 2. The appellant is pay the respondent's costs as agreed or as assessed.

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: 11 April 2019