O'Keefe v Integral Corporate Property Pty Ltd

Should an order be made dispensing with a hearing of the costs application?

1. The parties were invited to make submissions as to whether or not a hearing on the application for costs can be dispensed with under s.50(2) of the NCAT Act. The Respondent made no submissions on this question. The Appellant consented to the issue of costs being determined in the absence of the parties by considering the parties' written submissions.
2. The Appeal Panel agrees that an order should be made dispensing with the hearing and that such a course would avoid the parties being put to the unnecessary expense of a hearing on the question of costs.
3. Accordingly, an order has been made pursuant to s.50(2) of the NCAT Act dispensing with a hearing on the costs application.

What are the relevant statutory provisions governing the current costs application?

1. 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.
2. Rule 38 of the Civil and Administrative Tribunal Rules ("NCAT Rules"­) 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-- (a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10(2) of Schedule 4 to the Act in relation to the proceedings, or (b) the amount claimed or in dispute in the proceedings is more than $30,000."
3. Rule 38A of the NCAT Rules provides: (1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of: (a) enabling legislation, or (b) the Division Schedule for the Division of the Tribunal concerned, or the procedural rules. Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.
4. Because Rule 38 applied at first instance and the appeal was filed after 1 January 2016, Rule 38A applies to these proceedings before the Appeal Panel and Rule 38 applies to the question of costs of the appeal.
5. Both parties accepted that while Rule 38 applies by virtue of Rule 38A, the standard position under s.60 of the NCAT Act is not displaced for the purposes of determining the costs of the appeal: see Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25.
6. The effect of s.60(1) and (2) of the NCAT Act was set out in Allen v TriCare (Hastings) Limited at [71] and [76] as follows: [71] Section 60 of the NCAT Act states the general proposition in subs (1) that each party to proceedings in the Tribunal is to pay the party's own costs. Section 60(2) modifies this by permitting the Tribunal to award costs but "only if it is satisfied that there are special circumstances warranting an order of costs". … [76] "[S]pecial circumstances" for the purposes of s.60(2), are those which are out of the ordinary but they do not have to be extraordinary or exceptional: see the Appeal Panel in CBD Holdings Pty Ltd v Baguley [2016] NSWCATAP 168 [6]; citing the Court of Appeal in Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 at [60] which concerned the same expression in the previous legislation governing the (then) Administrative Decisions Tribunal."
7. Accordingly, the issue is whether or not we are satisfied that there are special circumstances warranting an order for costs. Further, even in such case, there remains a discretion whether or not to award costs: see Diaspora Holdings Pty Ltd v Owners SP 68608 [2019] NSWCATAP 250.

Respondent's submissions

1. The respondent's submissions were concise and succinct and relevantly we set them out in full as follows: There are special circumstance enlivening the discretion to order costs pursuant to section 60 of the Act: 1. On the appellant's argument, the value of the matter in dispute was over $30,000.00. The appellant was claiming an equitable interest in real property; 2. At all times the appellant was legally represented; 3. Properly advised the appellant ought not have: (i) pursued ground 1 of the appeal. The ground lacked merit. The appellant seemed to want a hearing de novo, whereas, the appeal was limited to a question of law and the finding at first instance, that there was a residential lease, was open on the facts before the tribunal at first instance; (ii) pursued ground 2 of the appeal, not having pursued the ground at first instance. 4. The respondent has facilitated the timely resolution of the appeal, including by consenting to a stay of the execution of the order for possession.

Appellant's submissions

1. The Appellant's submissions were also brief and relevantly we set them out in full as follows: 1. The Appellant states that there were no special circumstances in this matter. 2. No adverse cost orders were made in the first instance. 3. The Appellant did not act in a way that unnecessarily disadvantaged the Respondent in the proceedings. 4. The Appellant was not responsible for prolonging unreasonably the time taken to complete the proceedings. The proceedings were quickly resolved with the Appellant serving the documents according to the timetable and the hearing taking a couple of hours. 5. The Appellant made a claim that was tenable. 6. The proceedings were not complex, frivolous or vexatious or otherwise misconceived or lacking in substance. 7. The Appellant co-operated with the guiding principle to facilitate the just quick and cheap resolution of the real issue in the proceedings. Conclusion 8. The appeal brought by the Appellant was neither unmeritorious nor hopeless. Neither he nor the Respondent conducted the appeal in a way that unnecessarily disadvantaged the other or caused the proceedings to be unreasonably prolonged. Each party made appropriate concessions, which assisted in the narrowing of the issues and reduced the time required to determine the appeal. 9. The Appeal Tribunal should not be satisfied that the factors relied upon by the Respondent constitute special circumstances warranting an award of costs. 10. It follows that the Appeal Tribunal should not exercise the power to award costs in the Appeal.

Consideration

1. The first ground relied upon by the Respondent as evidencing a "special circumstance" was that "on the appellant's argument, the value of the matter in dispute was over $30,000.00". As we understand the contention, the Respondent was submitting that the underlying value of a matter in issue - viz, whether the Appellant had an equitable interest in the property - was over $30,000.00, not that "the amount claimed or in dispute in the proceedings is more than $30,000" within the meaning of Rule 38(2)(b).
2. We note that the Appeal Panel has drawn a distinction between the two, including where the proceedings involves an order for possession and termination of a residential lease rather than any claim in respect of, or dispute over, a sum of money: see Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 and The Owners Corporation Strata Plan No. 63341 v Malachite Holdings Pty Ltd [2018] NSWCATAP 256.
3. Bearing this distinction in mind, we are not satisfied, particularly in the context of a claim for possession, that the value of the land, or an alleged equitable interest in the land, being over $30,000 amounts to a special circumstance. No authority was cited in support of this proposition and we are not satisfied that such a circumstance can be said to be out of the ordinary.
4. The balance of the Respondent's submission we understand to revolve around the contention that the Appellant's claim was not tenable or that the proceedings were misconceived or lacking in substance.
5. We note this is a high hurdle to be met. In our view the Appellant's claim could not be described as lacking in substance, misconceived or not tenable. Accordingly, we are not satisfied that "special circumstances" exist so as to justify departure from the ordinary situation where each party is to pay its own costs.
6. As a result, there should be no order as to costs of the appeal and the Respondent's application for costs is dismissed.

Orders

1. The Orders of the Tribunal shall be: 1. Order pursuant to s.50(2) of the Civil and Administrative Tribunal Act 2013, dispensing with a hearing of the application for costs. 2. No order as to costs of the appeal. 3. The application for costs by 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: 22 June 2020