This is an application for costs by the successful respondent to an appeal brought by the appellant - Nicholls v Fortmann [2020] NSWCATAP 52.
The parties have provided concise written submissions and consent to us dispensing with a hearing of this application for costs. Both parties were given the opportunity to address in those submissions whether a further oral hearing was sought regarding the costs application. In our opinion the issues for determination can be adequately determined in the absence of the parties by considering the written submissions provided. We have read and considered the submissions of both parties on the issue of costs.
The respondents rely upon s 23 of the Dividing Fences Act 1991 (NSW) and s 60(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (the "NCAT sAct").
Section 23 of the Dividing Fences Act provides:
In any proceedings under this Act, the Local Court or the Civil and Administrative Tribunal may award costs against either party.
Section 60 of the NCAT Act provides:
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.
(5) In this section -
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.
Nicholls v Fortmann [2020] NSWCATAP 84 | Case summary | Zoe
It may perhaps be thought that s 23 provides an independent source of power for the Tribunal to award costs and, relevantly in this case, not be subject to the constraints found in sub-sections (1) and (2) of s 60. However, the point was not argued, the respondents being content to rely upon the provisions of s 60. In any event we would incline to the view, without deciding that this is so, that s 23 does not provide an independent source of power unfettered by s 60. Rather, we tend to think that s 23 allows for the possibility for costs orders, and s 60 governs, in certain respects, how the discretion as to costs is to be exercised. If we are right about that then the respondents were correct in confining their submissions to the provisions of s 60.
The accepted jurisprudence in the Tribunal, other than where the requirements of r 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) are met (which is not the situation in the present case), is summarised in Feng v OzWood (Australia) Pty Ltd [2020] NSWCATAP 42, namely:
"[7] Section 60 of the NCAT Act creates the general rule that each party to proceedings is to pay their own costs: s 60(1). We may only order costs "if satisfied that there are special circumstances warranting an award of costs (emphasis added)": s 60(2). Section 60(3) sets out a non-exhaustive list of factors that may be taken into account in deciding whether there are special circumstances warranting an award of costs. These include: that the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance: s 60(3)(e).
[8] The term "special circumstances" is not defined by the NCAT Act. It has been interpreted to mean circumstances that are out of the ordinary but not necessarily extraordinary or exceptional. The discretion to award costs must be exercised judicially having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs. (See eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [23]-[31]; Nguyen & Anor v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen & Anor (no 2) [2016] NSWCATAP 168 at [16].)"
In summary, the respondents submit that special circumstances exist, that is, that there are circumstances that are out of the ordinary and which warrant an award of costs, and that we ought to exercise our discretion to award them the costs of the appeal.
The respondents submit that the circumstances that are out of the ordinary are that:
1. the appeal was so weak as to have no tenable basis in fact or law per s 60(3)(c) of the NCAT Act;
2. the appeal was frivolous, vexatious or lacked substance per s 60(3)(e) of the NCAT Act;
3. they have incurred considerable legal expenses in responding to the conduct of the appellant over a number of years, they were legally represented on the appeal (as was the appellant) and that this legal representation (with its attendant costs) was reasonable [in reliance upon s 60(3)(g) of the NCAT Act].
In relation to s 60(3)(c) the Appeal Panel in Zucker v Burbank Montague Pty Ltd [2018] NSWCATAP 135 equated the words of s 60(3)(c) with the common law test applied for summary dismissal of proceedings. The Appeal Panel said at [44]:
"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) 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."
Without endorsing the Appeal Panel's conclusion in Zucker that the words of s 60(3)(c) "relate" to the common law test, we nevertheless accept that "manifestly groundless" and "clearly untenable" are equivalent expressions to the statutory test.
In relation to s 60(3)(e) the Appeal Panel in Feng said at [12]:
"The term 'lacking in substance' is not defined by the NCAT Act. Commenting on the meaning of that term in an equivalent but not identical statutory provision to s 60(3)(e), in The Owners Corporation of Strata Plan 4521 v Zouk & Anor [2007] NSWCA 23, the Court of Appeal concluded at [45], that the term 'lacking in substance' should be construed to mean 'not reasonably arguable'. We adopt that meaning."
The respondents submit that from the outset the appeal (and application for leave to appeal) had little prospect of success, no authority was cited by the appellant for the proposition that non-compliance with the relevant SEPP should have been regarded as a dominating factor, the appellant came nowhere near satisfying the test in Collins v Urban [2014] NSWCATAP 17 for a successful application for leave to appeal, the relative strengths of the parties' positions greatly favoured the respondents and the appellant's claims had no tenable basis in fact or law.
The appellant submits that there are no circumstances which take this case out of the ordinary. The appellant submits that the general rule is that each party bears their own costs. She rejects the respondents' submission that her appeal had "little prospects of success", but even if that were correct "little prospects" is not the same as no tenable basis in fact or law. She submits that "no tenable basis" is an extreme finding and must only be found in limited cases otherwise it would discourage parties from pursuing appeals.
The appellant submits this was a factually unusual case, but we do not agree. Every case is different, and every different dividing fences case will involve different facts. That doesn't make those cases, or this one, unusual.
The appellant submits that the respondents had not made any "claims" [being the word used in s 60(3)(c)]. We disagree. "Claims" is simply a reference to the competing contentions of the parties in the proceedings and not to one party claiming something from the other.
The appellant submits that the Tribunal below rejected the submission that the original proceedings were hopeless. Whist that may be correct, it is irrelevant. What is in issue is whether the appeal was untenable, which is a different question.
The appellant submits that her legal representatives would not have pursued an appeal on her behalf if they had considered the appeal was lacking in substance. What the appellants legal representatives thought (about which there is no evidence) is not to the point. The test is not whether a party's lawyers thought it was untenable, but whether, objectively, it was untenable. Similarly, whether the respondents regarded the appeal as having "little prospects of success" is not to the point.
The appellant submits that there were legal issues that warranted determination, meaning, we assume, that there were some important legal issues of principle to be decided. The appellant did not identify what legal issues she asserted warranted determination. None are apparent to us. The issues upon which the appeal was decided were decided by the orthodox application of decided principles applying to applications for leave to appeal.
The appellant submitted that her appeal was "genuinely pursued". That may be so, but that is not the test. The courts are not unfamiliar with genuinely pursued but hopeless cases.
Evaluations of the matters set out in s 60(3)(c) and (e) in a case such as the present are necessarily impressionistic and incapable of fine analysis or detailed explanation.
Having said that, we do find that the appeal did lack substance and did not have a tenable basis in fact or law.
As finally prosecuted, the appellant sought leave to appeal on a ground other than a question of law on the basis that the decision of the Tribunal below was against the weight of evidence. In submissions the appellant referred to the fact that the existing fence did not comply with the relevant SEPP and submitted that this was a dominating factor to be considered on the question of whether there was a "sufficient dividing fence".
But there were other factors which the Tribunal expressly considered, and there was no basis for describing non-compliance with the SEPP as a "dominating" factor. No authority was cited to support the proposition, nor any submissions made as to how we should come to such a holding based upon a textual analysis of the relevant legislation or otherwise. The assertion was made, but no submissions were advanced to support it.
Further, the submission that the finding that there was a sufficient dividing fence was against the weight of evidence was clearly wrong. The evidence of non-compliance with the SEPP was but one piece of evidence relevant to the question of "sufficient dividing fence", and thus for the reasons we gave in our principal decision in which we identified that other evidence, the appellant was unable to make a case that the decision was against the weight of evidence in the sense described in the authorities, namely that the evidence, in its totality, preponderated so strongly against the conclusion found by the Tribunal that it could be said that the conclusion was not one that a reasonable Tribunal member could reach.
We further said that, although we were not ultimately called upon to decide the issue, we would not have granted leave to appeal in any event as the appellant had not persuaded us that the appeal (if leave was granted) raised an issue of principle, a question of public importance or a matter of administration or policy which might have general application, or concerned an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or involved an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand (stage two of the leave test).
Individually, each of those three issues, dominant factor, weight of evidence and stage two of the leave test, might be thought to be untenable. But in combination, given each one would result in the application for leave to appeal being refused, they made this application for leave untenable and lacking in substance and justifies, in our opinion, the awarding of costs.
Although that finding obviates the need for us to say anything about the other issues, we shall briefly address them.
The respondents submitted the appeal was frivolous and vexatious because the issues had been canvassed and addressed by Police involvement, Local Court involvement in AVPO proceedings, investigations by the Central Coast Council, the intervention of lawyers and the hearing before the Tribunal below.
We reject this submission; it is cast too widely. The relevant proceeding we are dealing with is the appeal, and whether the Tribunal below erred. Those issues were not dealt with elsewhere, albeit the substratum of facts and considerations relevant to the appeal have arisen in different ways in some of the other forums identified. In addition, we would not find, on the materials before us, that the appeal was brought frivolously nor vexatiously.
The respondent submitted that appellant "falsely" claimed that she gave unchallenged evidence before the Tribunal that fences in the area were of post and rail construction. The submission to that effect by the appellant was incorrect, but there is no basis for finding that it was deliberately incorrect i.e. false, as opposed to being the result of loose language or inattention to the whole of the evidence.
Finally, and in relation to s 60(3)(g), the respondents submit they have incurred considerable legal expenses in responding to the conduct of the appellant over a number of years, the appellant was legally represented and therefore it was reasonable for the respondents to also be legally represented. That may be so, but that fact does not take this case (in respect of the appeal proceedings) out of the ordinary.
No evidence was led as to the asserted "considerable legal expenses in responding to the conduct of the appellant over a number of years", nor details of the conduct of the appellant to which responses were required, and so we are left somewhat in the dark. Whilst we have some appreciation from the reasons of the Tribunal below of the unfortunate history which has arisen between the parties, we are unable to say on that material alone that the circumstances are out of the ordinary, nor do we consider that what has happened outside the particular litigation with which we are concerned is relevant to "special circumstances", at least in this case. In any event, it is the common experience of lawyers, and is not out of the ordinary, that parties can have a lengthy adversarial history of relations and preceding court proceedings. Further, issues that may arise in matters involving the Police and the Local Court are not identical to those that arise in the Tribunal concerning the Dividing Fences Act 1991 (NSW). We would not have accepted those submissions as giving rise to special circumstances.
We accept that it is reasonable for the respondents to be legally represented when the appellant was legally represented, but we would not regard that fact as being out of the ordinary.
In the result; having considered the factors under s 60 (3) of the NCAT Act we are satisfied that "special circumstances" have been established under s 60 (2) of the NCAT Act; and the respondents should have their costs of the appeal.
[2]
Orders
We make the following orders:
1. An oral hearing on costs is dispensed with under s 50 (2) of the Civil and Administrative Tribunal Act 2013 ('the NCAT Act').
2. The appellant is to pay the respondents' costs of the appeal as agreed or assessed in accordance with s 60(4)(b) of the NCAT Act.
[3]
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: 13 May 2020