Outlaw Construction and Transport Services Pty Ltd v Taleb

The Respondent's Submissions

1. The respondent relied on s 60(3)(c), (d) and (g).
2. The respondent submitted that the appellant's basis for lodging the appeal was unclear, the grounds upon which the appeal was lodged were unclear and were unsubstantiated by the appellant during the Appeal hearing.
3. The respondent submitted that the appellant's grounds for appeal were lacking in substance and that during the hearing of the appeal the appellant did not, to a large degree, substantiate those grounds.
4. The respondent submitted that the nature and complexity of the appeal "overwhelmed" him to the extent that he felt the need to retain solicitors to appear for him on the appeal.
5. The respondent submitted that the appellant's submissions and grounds of appeal unnecessarily added to the complexity of the appeal and resulted in a very time-consuming task of preparing and responding to the appeal.
6. The respondent submitted (but did not prove by admissible evidence) that he had made an offer of $1,700.00 for the full and final resolution of the matter to the appellant on 25 March 2021. The appellant refused the offer, and the offer was lower than the amount that the appellant is now required to pay.

The Appellant's Submissions

1. The appellant submitted that no "special circumstances" per s 60(3) existed.
2. In particular, the appellant submitted that it did not "make the original Appeal in a manner 'which unnecessarily disadvantaged'" the respondent.
3. The appellant submitted that its appeal was not frivolous, vexatious, or misconceived as submitted by the respondent.
4. The appellant submitted that it had exhibited goodwill and reasonability in this matter from the start and had met the respondent's claims on two occasions returning approximately $1,200.00 to him. These matters are not relevant to the issue of costs.
5. The appellant submitted that there was no evidence provided in relation to the offer referred to in the respondent's submissions and took issue with the facts asserted (although the appellant also provided no evidence to support this assertion).
6. The appellant submitted that if the respondent desired to rely on his solicitor's Memorandum of Costs and Disbursements (which had been provided with his submissions) then the appellant sought a detailed "bill of claim".
7. The appellant said that the Appeal Panel's directions made on 7 July 2021 should be taken into account. The relevant directions (as recorded in the Tribunal's records) made that day were: "1. Leave is given to the Appellant to be legally represented on condition that no legal costs may be recovered by that party in the appeal. 2 Leave is given to the Respondent to be legally represented."
8. Why the restriction on the recoverability of legal costs was applied to the appellant and not the respondent is unknown to us, but internal enquiries made by us assure us that there is no typographical error in the orders as recorded. The appellant did not appeal from those orders. Therefore, prima facie, the restriction applying to the appellant in relation to costs does not apply to the respondent.
9. The appellant submitted that the orders pronounced orally by the Appeal Panel that day were different to what is contained in the written orders. In an email from the appellant's solicitors (per Mr Fawkner) to the Appeal Panel (as constituted on 7 July 2021) dated 9 September 2021, the appellant said: "The Appellant relies on your telephone direction of 7th July 2021 which not only referred to the matter of costs, but stated that costs would not formed (sic) part of the Appeal argument. The contents of the 7th July 2021 telephone conference would form part of NCAT's telephone transcript of that conference. We rely on your direction, the telephone conference and the recall of myself and Mr Antony McPherson referring to your direction that costs would not form part of the Appeal argument."
10. Thus, the appellant was asserting in that email that the orders announced orally at the directions hearing were different to those recorded, and that the orders announced orally were to the effect that neither party would be able to recover legal costs of the appeal (rather than that restriction applying solely to the appellant as recorded in the written orders).
11. It was because of that email that we made the following direction on 13 September 2021 (corrected on 15 September 2021): The Appeal Panel refers to the appellant's solicitor's email dated 9 September 2021. To allow for the parties to file and serve evidence as to what occurred at the Directions Hearing of 7 July 2021, if they wish to do so, the Appeal Panel has varied its Orders 3(c) and (d) made on 27 August 2021 as follows: c. the respondent to any costs application is to lodge with the Appeal Panel and serve on the applicant for costs any written submissions of no more than five pages and any evidence to be relied upon on or before 13 October 2021; d. any reply submissions limited to three pages and any evidence to be relied upon are to be lodged with the Appeal Panel and served on the other party on or before 27 October 2021.
12. The purpose of that direction, and the amendment to the directions made on 27 August 2021, was to provide an opportunity to the appellant to put on evidence as to what was said at the directions hearing of 7 July 2021 which may have included statements by Mr Fawkner and Mr McPherson as to their recollection of what was said, their file notes of what was said (if files notes were taken) or a sound recording of the directions hearing, if they desired to prove different oral orders were made to those recorded in writing.
13. That invitation was not taken up by the appellant and no evidence was filed to contest the accuracy of the Appeal Panel's orders as recorded in the written orders.
14. As the appellant did not provide any evidence that the oral orders pronounced were different to the written orders, we therefore reject the submission that the oral orders pronounced on 7 July 2021 were different to the written orders. It follows that the respondent is not precluded from seeking his professional costs from the appellant.
15. The appellant submitted that it relied upon legal advice from the very commencement of this matter and that it used the legal process, available and open to it, to seek an equitable and fair outcome. This is irrelevant to the costs application.
16. The appellant submitted that it relied on s 93 of the Legal Profession Uniform Law Application Act (NSW) 2014 ("Legal Act 1") in respect to the general matter of "costs", and in particular s 93(1)(b) when assessing costs with respect to what is a "fair and reasonable" appraisal.
17. Section 93 says that the Costs Assessment Rules Committee may make rules (costs assessment rules), not inconsistent with that Act or the Legal Profession Uniform Law (NSW), for or with respect to costs assessments and reviews. The appellant did not identify any rule on which it relied or make any submissions about the applicability of that rule and what should flow from it.
18. The appellant also submitted that the guidance used in Part 4.3 Legal Costs, Division 3, of the Legal Profession Uniform Law (NSW) ("Legal Act 2") was also relied upon. That Division relates to costs disclosure obligations which apply to legal practitioners.
19. Again, the appellant did not identify what part of Division 3 was relied upon, how it was relied upon and how it was said that that provision (or provisions) applied to this case and what should flow from it.
20. The appellant submitted that only a lump sum bill had been provided and submitted that if costs were awarded to the respondent, then "this submission follows S.187 Legal Act 2". We take this to mean that the appellant was seeking an itemised bill.
21. The appellant submitted that if any costs order were to be made then it should be made recognising the difficulties that all small businesses in NSW are facing during this COVID-19 pandemic period, that the appellant fell into the category of a NSW small business and its income, including that paid by the respondent, was incurred during the COVID period. This fact, even if true, is irrelevant to the question of costs.
22. Finally, the appellant repeated the baseless submission, which was also made during the appeal (and rejected by us), that the Australian Consumer Law required the respondent to return the vehicle to the appellant to repair.

Decision

1. In our opinion an order for costs should be made in favour of the respondent, the order should be for a lump sum of $3,000 incl GST, but no order should be made in relation to the Comptune report.
2. We accept the respondent's submissions that, per s 60(3)(c) of the NCAT Act, all of the appellant's claims made on the appeal had no tenable basis in fact or law.
3. We shall not repeat the reasons we gave in our principal decision but suffice to say that we did not consider any of the three grounds of appeal advanced to have any arguable or tenable basis.
4. In summary, the first appeal ground relied on an ACCC policy document as making the law, rather than any statutory provision or binding authority, an untenable proposition. The second appeal ground failed because, inter alia, no attempt was made by the appellant to identify any question of law or to identify any other ground of appeal said to arise in relation to the matter identified. The third appeal ground failed because, inter alia, it wrongly contended that a warranty took precedence over the statutory provisions.
5. Having been satisfied that that special circumstance exists in this case, the next question is whether we should exercise our discretion in the respondent's favour.
6. The starting point in exercising the discretion is that the "usual order for costs" is that a successful party should be entitled to an order for costs in their favour. The question then becomes whether any conduct of the successful party should disentitle it to costs.
7. There was no disentitling conduct by the respondent in the conduct of the proceedings which disentitles it to an order for costs. It was successful in defending an appeal which should never have been brought because it lacked any tenable basis, and it should receive its costs.
8. An Appeal Panel has power under s 60(4) of the NCAT Act to fix the costs payable under a costs order: see Chi v Roger Fuller Pty Ltd (No 2) [2018] NSWCATAP 220 at [49]; Hanna v BOS Holdings Pty Ltd (No 2) [2019] NSWCATAP 73 at [15]; Five D Pty Ltd v The Owners-Strata Plan No 79642 [2018] NSWCATAP 244 at [31-32].
9. In Hamod v State of New South Wales and Anor [2011] NSWCA 375 Beazley JA (as Her Excellency then was), with whom Giles and Whealy JJA agreed, set out a number of principles applying to lump sum costs orders in courts at [813]-[820].
10. In summary, her Honour said that the discretion to order a lump sum for costs is not confined and may be exercised whenever the circumstances warrant its exercise, having regard to the scope and purpose of the provision. In general, the power should only be exercised when the court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available. Courts have typically applied a discount in assessing costs on a gross sum basis and before exercising the power the court should be confident that the approach taken to estimate costs is fair, logical and reasonable.
11. Her Honour said that the factors that merit particular consideration include: the relative responsibility of the parties for the costs incurred; the degree of any disproportion between the issue litigated and the costs claimed; the complexity of proceedings in relation to their cost; and the capacity of the unsuccessful party to satisfy any costs liability.
12. Her Honour said that the exercise of the power to order a lump sum for costs is particularly appropriate where the costs have been incurred in lengthy or complex cases and it is desirable to avoid the expense, delay and aggravation likely to be involved in contested costs assessment. This may arise either from the likely length and complexity of the assessment process or from the likelihood that the additional costs of formal assessment would disadvantage the successful party because of the likely inability of the unsuccessful party to discharge the costs liability in any event.
13. Her Honour said that the power may also be exercised where a party's conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings and that the assessment of any lump sum to be awarded must represent a review of the successful party's costs by reference to the pleadings and complexity of the issues raised on the pleadings; the interlocutory processes; the preparation for final hearing and the final hearing.
14. Her Honour said that in the exercise of its discretion a court is not required to undertake a detailed examination of the kind that would be appropriate to taxation or formal costs assessment.
15. In the Tribunal, there are additional statutory considerations, including s 60 itself, and s 36(4) which provides that 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.
16. The amount claimed is modest, but applying a small discount to arrive at a sum of $3,000 incl GST, we are of the opinion that that sum is appropriate and is fair between the parties. That sum is modest taking into account the nature and complexity of the appeal, and we should make a lump sum costs order of that magnitude to avoid further lengthening these proceedings by allowing for a costs assessment or itemised bills. The appellant is solely responsible for the incurring of those unnecessary costs given its hopeless appeal and it is desirable to avoid the expense, delay and aggravation likely to be involved in a contested costs assessment, particularly where there is some doubt (given the appellant's submission) that the additional cost of a formal assessment would disadvantage the respondent because of the possible inability of the appellant to discharge the costs liability in any event.
17. However, the respondent should not be compensated for the Comptune report which was not received in evidence by the Tribunal due to its late service. As the report was not used by the respondent in the proceedings, the appellant should not have to pay for it.

Orders

1. We make the following orders: 1. An oral hearing of this costs application is dispensed with. 2. The appellant is to pay the respondent's costs of the appeal in the sum of $3,000 incl GST forthwith.

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: 03 December 2021