Nimmons v The Owners Strata Plan No 10441

NCAT Appeal Panel|2024-10-14|Before: Blake AM

Introduction

The OSP10441 costs application is pursuant to s 60(2) of the NCAT Act. The determination of this application involves answering the following two questions: 1. whether there are special circumstances warranting an award of costs in favour of OSP10441; 2. if so, whether the discretion should be exercised to award costs;
Before considering this issue, it is appropriate to set out the applicable provisions of the NCAT Act and legal principles and summarise the submissions of the parties. We have also made a general comment.

The applicable provisions of the NCAT Act

Section 60 deals with costs, and relevantly 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 - … (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, … (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, … (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 …

"Special circumstances" in s 60(2) of the NCAT Act

"Special circumstances" in s 60(2) of the NCAT Act are circumstances that are out of the ordinary; they do not have to be extraordinary or exceptional circumstances: CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [32].
In considering whether special circumstances exist for the purposes of s 60(2) of the NCAT Act: 1. each case will depend upon on its own particular facts and circumstances: Brunsprop Pty Ltd v Joanne Hay & Wes Davies [2015] NSWCATAP 152 at [27]; 2. mere success (or failure) of an application does not give rise to special circumstances: The Owners - Strata Plan 5319 v Price [2020] NSWCATAP 245 at [46].
As to the factor in s 60(3)(c) of the NCAT Act, in Zucker v Burbank Montague Pty Ltd [2018] NSWCATAP 135 (Zucker) at [44] the Appeal Panel made the following observations: "[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) 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."
As to the factor in s 60(3)(e) of the NCAT Act, in BDK v Department of Education and Communities [2015] NSWCATAP 129 (BDK) at [62]-[66], in which the appellant was self-represented as she had been in the decision below, the Appeal Panel said in relation to the identical expression in s 55(1)(b) of the NCAT Act: "[62] It will be seen that this Tribunal's power is somewhat differently expressed. The Tribunal's power refers not only applies to proceedings that are "frivolous" or "vexatious", but then applies to proceedings that are "misconceived" or "lacking in substance". Section 55(1)(b) does not have a generic catch-all category of "abuse of process" to pick up conduct in relation to the issuance and pursuit of proceedings that might, arguably, fall outside the four specific categories set out there. [63] In Alchin v Rail Corporation NSW [2012] NSWADT 142 Judicial Member Wright SC (as he then was) examined the meaning of the predecessor provision to s 55(1)(b) - s 73(5)(g)(ii) of the Administrative Decisions Tribunal Act 1977. As to the meaning of "misconceived" and "lacking in substance", he said: 25 The expressions used in s 92(1)(a)(i) of the ADA, namely "misconceived" and "lacking in substance" are found not only in the ADA but also in s 73(5)(g) of the ADT Act and similar legislation in other states. With respect to a similar provision found in the Equal Opportunity Act 1984 (Vic), Ormiston JA in State Electricity Commission of Victoria v Rabel [1998] 1 VR 102 at [14] said: "misconceived" and "lacking in substance" have not, so far as I am aware, been used in this context before though each expression is commonly used by lawyers, the one connoting a misunderstanding of legal principle and the other connoting an untenable proposition of law or fact. If one may discern, in these provisions, an attempt to express the powers of tribunals in non-technical language, then "misconceived" would represent a claim which did "not disclose a cause of action" …, whereas "lacking in substance" might be seen to represent a claim where the defendant could obtain summary judgment … 26 This approach of construing "misconceived" as including a misunderstanding of legal principle and "lacking in substance" as encompassing an untenable proposition of fact or law has been applied by the Tribunal in many decisions including, for example, Keene v Director-General, Dept of Justice and Attorney-General [2011] NSWADT 59 at [14], McDonald v Central Coast Community Legal Centre [2008] NSWADT 96 at [22] and Stanborough v Woolworths Ltd [2005] NSWADT 203 at [50]. [64] In the present case, the Tribunal referred to the frequently-cited explanation of this term by Roden J in Attorney-General v Wentworth (1988) 14 NSWLR 481 at 491: 1. Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought. 2. They are vexatious if they are brought for collateral purposes, and not for the purpose of having the court adjudicate on the issues to which they give rise. 3. They are also properly to be regarded as vexatious if, irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless. [65] It will be seen that Roden J's first category covers conduct that falls within the meaning of "frivolous", while his third category embraces the kind of cases to which the expressions "misconceived" and "lacking in substance" are directed (or, in the case of the UCPR categories, cases not disclosing a reasonable cause of action). [66] In our view a reasonably broad connotation should be given to the meaning of the four categories of conduct identified by s 55(1)(b). The intent of the provision, as we see it, is to seek to give the Tribunal a broad power to deal with abuses of its processes, and for them to be interpreted and applied in a power which captures any kind of abuse of process, that can reasonably be seen to fall within their compass. While "misconceived" and "lacking in substance" may be seen as relatively specific terms, we think a flexible, purposive interpretation can be adopted in determining whether proceedings are "frivolous" or "vexatious", conscious always of the gravity for an applicant or plaintiff of summary dismissal of proceedings."

The exercise of the discretion in s 60(2) of the NCAT Act

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. However, those findings do not constitute the whole of the relevant matters to be considered in deciding what, if any, order for costs should be made. Rather, the principles applicable to awarding costs generally must also be taken into account: Brodyn Pty Ltd v Owners Corporation Strata Plan 73019 (No 2) [2016] NSWCATAP 224 at [24].
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: eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48].
In The Owners - Strata Plan No. 47027 v Peter Clisdell Pty Ltd (No 2) [2018] NSWCATAP 46 at [44] the Appeal Panel decided it would not have exercised the discretion under s 60(2) of the NCAT for reasons which included that the respondent was not legally represented at the hearing of the appeal.

The OSP10441 costs submissions

In the OSP10441 costs submissions, OSP10441 has made the following submissions: 1. special circumstances exist because: 1. first, the appeal had no tenable basis in fact or law, insofar as it related to the claim for temporary rental accommodation (Loss Claim) and costs (Costs Claim) being the primary contentions on the appeal, within the meaning of s 60(3)(c) of the NCAT Act: and 2. second, the appeal with respect to those claims were frivolous, misconceived and lacking in substance, within the meaning of s 60(3)(e) of the NCAT Act; 1. the Appeal Decision demonstrates the following matters: 1. the contention that there was no evidence to support the first-instance finding on the Loss claim was destined to fail - the Senior Member clearly identified the relevant evidence in his decision, as highlighted in the Appeal Decision at [44]. Indeed, the evidence came from Ms Nimmons' own documents; 2. the contention of a failure to provide adequate reasons regarding the Loss Claim was similarly destined to fail the reasons were highlighted in the Appeal Decision at [49]. At no stage did Ms Nimmons ever articulate what reasons were lacking and ought to have been provided; 3. the Costs Claim was destined to fail, notwithstanding any finding as to special circumstances because the Senior Member had explained at some length his reasoning process for refusing to exercise any enlivened discretion to award costs, as identified in the Appeal Decision at [52(2)]; 1. where the errors raised on appeal were destined to fail, they are appropriately characterised as untenable, frivolous, misconceived or lacking in substance; 2. the same is true of the leave application, in circumstances where the basis for its failure was plainly identifiable from reasons provided by the Senior Member and Ms Nimmons' own documents which were accepted as evidence; 3. these circumstances warrant a costs order because: 1. the practical result of the appeal, being the relevant event which costs ought to follow in the ordinary way, was that Ms Nimmons was overwhelmingly unsuccessful, demonstrated by the Appeal Decision as follows: 1. (i) at [33], the Appeal Decision identified the four questions of law which could discerned from the notice of appeal. Ms Nimmons was unsuccessful on three out of four questions; 2. at [34], the Appeal Decision identified three bases for the accompanying leave to appeal application. Ms Nimmons was unsuccessful on all three bases; 1. the reason Ms Nimmons was overwhelmingly unsuccessful was because the notice of appeal was at its heart an impermissible attempt to relitigate the claims which failed at first instance (the Loss Claim and Costs Claim), as evidenced by scope and content of the 10 July 2024 Nimmons statement, by reference to newly created evidence and newly conceived costs submissions - it was an attempt to have a second bite of the cherry. rather than a genuine attempt to engage with truly appellable errors; 2. it was put to the costs of engaging with a misconceived and untenable appeal, which should not have been brought, warranting a costs order, the purpose of such an order being compensatory in nature and appropriate in the case of an untenable case.

The Nimmons costs submissions

In the Nimmons costs submissions, Ms Nimmons has made the following submissions: 1. allowing a cost order would depart from the guideline in s 36(1) of the NCAT Act; 2. the mere fact that the appeal was unsuccessful does not automatically translate to a finding that it was untenable. Her appeal raised legitimate arguments for appeal, which were within the bounds of reasonable legal interpretation and not devoid of merit. Further, her appeal was not entirely unsuccessful; 3. while her appeal was not successful, the Appeal Panel did note that the Senior Member did not provide sufficient reasons for finding there were not special circumstances warranting costs. This goes against OSP10441's submissions that her appeal had no tenable bases in fact or law and that her appeal was frivolous, misconceived and lacking in substance; 4. costs awards must be proportionate to the complexity and conduct of the case. The appeal raised substantial questions about the application of the law and the factual findings. The complexity of the issues involved justified the appeal and demonstrates that the appeal was not a mere attempt to relitigate. She acted within the bounds of reasonable legal strategy. The fact that the appeal did not succeed does not reflect unreasonable or improper conduct on her part.

A general comment

We do not accept the submission of Ms Nimmons that allowing a cost order would depart from the guideline in s 36(1) of the NCAT Act. We acknowledge that we are required by s 36(2)(a) of the NCAT Act to seek to give effect to the guiding principle in s 36(1) to "to facilitate the just, quick and cheap resolution of the real issues in the proceedings" in exercising the powers conferred by s 60 of the NCAT Act. However, s 60(2) of the NCAT Act confers a discretion to make a costs order in favour of a party if the Tribunal is satisfied that there are special circumstances warranting an award of costs. The exercise of this discretion to make an order for costs where the required special circumstances exist is not inconsistent with the guiding principle in s 36(1) of the NCAT Act.

Whether there are special circumstances warranting an award of costs in favour of OSP10441

We are not satisfied that there are special circumstances warranting an award of costs in favour of OSP10441 within s 60(2) of the NCAT Act for the following reasons: 1. in relation to the question of law of whether the Tribunal constructively failed to exercise its jurisdiction by not addressing the question of whether a quarantine order should be made in respect of levies for the costs of OSP10441 to comply with the work order and the money order, and for its costs of the proceedings at first instance, we accepted the submissions of Ms Nimmons that the Tribunal constructively failed to exercise its jurisdiction and the appeal was allowed in relation to this issue. We rejected OSP10441's submissions on this issue; 2. in relation to the question of law of whether the Senior Member failed to provide adequate reasons for his finding that there were no special circumstances warranting an award of costs in favour of Ms Nimmons and if there were special circumstances the nature of the case did not warrant an order for costs, we accepted the submissions of Ms Nimmons that the Senior Member made an error of law in failing to provide adequate reasons. Our dismissal of the appeal on this issue was on the ground that we were not satisfied that this error was material in the sense that it "might" or "may" have made a difference to the decision not to award costs in her favour. OSP10441's submissions did not address this ground for dismissing the appeal on this issue; 3. while we rejected the submissions of Ms Nimmons in relation to the other two questions of law and the grounds on which she sought leave to appeal, we are not satisfied that Ms Nimmons was overwhelmingly unsuccessful. Further, we are not satisfied that the other two questions of law and the grounds on which she sought leave to appeal were, having regard to the principles in Zucker at [44] and BDK at [62]-[66], either had no tenable basis in fact or law within s 60(3)(c) of the NCAT Act or were frivolous or otherwise misconceived or lacking in substance within s 60(3)(e) of the NCAT Act.

If so, whether the discretion should be exercised to award costs

In view of our answer to the first question, this question does not need to be answered. If we had found that there are special circumstances warranting an award of costs in favour of OSP10441, we would have decided not to exercise the discretion under s 60(2) of the NCAT Act to award costs in its favour for the following reasons: 1. Ms Nimmons was self-represented; 2. in the OSP10441 costs application OSP10441 failed to differentiate between the particular issues on which it was and was not successful in the appeal.

Orders

We make the following orders: 1. A hearing of the costs application of the respondent is dispensed with. 2. The costs application of the respondent 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. 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: 16 October 2024

Equal Opportunity Act 1984(Vic)

Overview

On 12 August 2024, we made a decision that the appeal should be allowed in part, the appeal should otherwise be dismissed, leave to appeal should be refused, and there should be no order as to the costs of the appeal (the costs order). We also made procedural orders for evidence and submissions including on the question of whether an oral hearing may be dispensed with if a party sought to vary the costs order: Nimmons v The Owners - Strata Plan No 10441 [2024] NSWCATAP 157 (the Appeal Decision).
On 14 August 2024, OSP10441 applied to vary the costs order to seek the following order (the OSP10441 costs application): "The applicant to pay the respondent's costs of the notice of appeal filed 24 May 2024."
We have decided not to vary the costs order in the manner sought in the OSP10441 costs application.
These reasons for decision should be read with, and use the same abbreviations as in, the Appeal Decision.

At a glance

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Judgment (11 paragraphs)

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Cases Cited (12)