Polovin v Miller

NCAT Appeal Panel|2015-06-19

Solicitors: Knight Lawyers (Appellant) Gerald Aronstan (Respondents) File Number(s): AP 14/54366. Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 18 June, 9 September and 13 October 2014 Before: J Smith, Senior Member File Number(s): HB 13/37917

Introduction

The Appeal Panel published its decision in this matter on 5 May 2015: Polovin v Miller [2015] NSWCATAP 6.
The appellant had submitted that the Civil and Commercial Division of the Tribunal (the Tribunal) had made two errors of law. Ground 1 was that because the amount of damages claimed by the respondents exceeded the limit of the Tribunal's jurisdiction under the Home Building Act 1989, the orders made at those hearings were void. Ground 2, which arose for determination only if Ground 1 was rejected, was that a costs order made by the Tribunal against the appellant at a hearing on 13 October 2014 was not "fair and equitable" and was "against the weight of the evidence." These are references to cl 12 of Sch 4 of the Civil and Administrative Tribunal Act 2013 (the NCAT Act).
The appeal was allowed in part. The Appeal Panel was satisfied that Ground 1 must fail, and that Ground 2 was made out.
The Appeal Panel noted in its reasons that the parties had indicated that they wished to be heard on their costs of the appeal. The Appeal Panel provisionally indicated that, as neither of the parties had been wholly successful, its provisional view was that an application for costs was unlikely to succeed.

Oral hearing on costs

The appellant states that the Tribunal (that is the Appeal Panel) would be "well served" by oral submissions on costs, given our preliminary view (that is that any application for costs would be unlikely to succeed). The respondents oppose this course. They submit that there is nothing complex to be decided and that they are content for the matter to be decided "on the papers". They submit that a further hearing will just cause further unnecessary costs.
We agree. We see no reason why the issue of costs should not be determined on the papers. We have now had the benefit of written submissions from both parties. An oral hearing on an ancillary matter such as costs adds to delay and to further expense incurred by all the parties.

Appellant's submissions

The appellant filed submissions on costs on 25 May 2015. The submissions were prepared by the appellant's counsel. The appellant submits that her appeal was "completely successful", and that, in the "ordinary course", costs should follow the event: Oshlack v Richmond River Council (1998) 193 CLR 72. The submissions then refer to the orthodox propositions (at least where there is no statutory presumption against the awarding of costs) that: 1. The purpose of an order for costs is to compensate the person in whose favour it is made, not to punish the person against whom the order is made: Allplastics Engineering Pty Ltd v Dornoch Ltd [2006] NSWCA 33. 2. The Tribunal has a discretion to consider the overall justice of the case: Singer v Berghouse (1993) 114 ALR 521. 3. Any reason not to award a successful party costs must be exercised judicially and according to the rules of reason and justice and not for reasons of benevolence or sympathy to achieve any other outcome such as to minimise the conflict between parties: Williams v Lewer [1974] 2 NSWLR 2.
The appellant submits that because she did not succeed in relation to the question of jurisdiction, but did "succeed in relation to the principle of being fair and equitable", that was not a sufficient reason to deprive her of her costs. She further submits that even if the Appeal Panel finds that the question of jurisdiction was entirely spurious and without merit and not arguable, it would be appropriately open to the Appeal Panel to "at best" deprive the appellant of only part of her costs. In his respect she nominates 20 to 25%.
The appellant further submits that there was disentitling conduct on behalf of the respondents that would warrant an order as to costs.
Finally, the appellant's submissions consider the question of costs orders where there is a "question of multiple issues".
In conclusion, the appellant submits that the appropriate starting point remains the presumption that costs follow the event, and that that the enquiry then becomes whether, in the exercise of the Appeal Panel's discretion, the presumption should be displaced or whether some other order is to be preferred.

Respondents' submissions

The respondents' submissions may be summarised as follows. 1. The appellant's submissions do not address s 60 of the Civil and Administrative Tribunal Act 2013 (the NCAT Act). 2. The appellant has failed to identify any "special circumstances" necessary to displace the presumption against the award of costs. 3. The central issue in the appeal was a challenge to the ruling on the Tribunal's jurisdiction. That ground was rejected. Therefore the submission that "the appeal was therefore completely successful" and that "cost should follow the event" is plainly wrong. 4. The submission that there was no conduct on the part of the appellant displacing the presumption that costs follow the event misses the point. 5. The submission that there was disentitling conduct on the part of the respondents' solicitor is without foundation and also misses the point 6. The suggestion that the appellant is entitled to an order for costs because the jurisdictional issue was not "dominant" missed the point and does not make sense.
These points are then amplified and substantiated in the respondents" submissions.

Consideration

We agree with the respondents' submissions; there should be no award of costs.
The basal submission of the appellant, namely that costs follow the event, is, in this jurisdiction, incorrect. The principles governing the awarding of costs in the Civil and Administrative Tribunal (including an internal appeal heard by the Appeal Panel) are set out in s 60 of the NCAT Act.
Section 60 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.
Section 60 has been considered in many recent decisions: see for instance CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21; Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120; Kurmond Homes Pty Ltd v Spiteri [2015] NSWCATAP 48; and Rose Nettis Pty Ltd v Three Tall Trees Pty Ltd [2015] NSWCATAP 51.
Section 60(1) lays down the prima facie principle that the parties to Tribunal proceedings bear their own costs. The factors set out in s 60(3) refer, in essence, to disentitling conduct of a party. The short submissions provided by the appellant on this issue do not persuade us that there are special circumstances warranting an order that the respondents pay the appellant's costs of the proceedings before the Appeal Panel. Indeed, the submissions received from the appellant failed wholly to address the criteria set out in s 60. Even if the appellant were "completely successful" as claimed (a submission which must be rejected: see para [80] of the appeal reasons), she would not for that reason alone be entitled to a costs order under those criteria.

Orders

The order of the Appeal Panel is that the appellant's application for costs 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: 19 June 2015

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Judgment (8 paragraphs)

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Cases Cited (8)