Pregard Pty Ltd v Ballinger

NCAT Appeal Panel|2021-08-26

Before: K Ross, Senior Member File Number(s): HB17/53947, HB18/15261

Introduction

By Notice of Appeal filed on 17 May 2021 Pregard Pty Limited ("the Appellant") appealed against orders for costs made by the Tribunal on 14 April 2021 in two sets of proceedings between the Appellant and Bradley and Kristi Ballinger ("the Respondents"). The costs orders arose out of the Tribunal's determination of two sets of substantive proceedings between the parties, being a claim by the Appellant with respect to payment for work carried out by it for the Respondents, and a claim by the Respondents against the Appellant with respect to building work which was asserted to have been defective and incomplete.
The Tribunal ordered with respect to the Appellant's proceedings that each party pay its own costs. The Appellant was ordered to pay the costs of the Respondents of the latter proceedings on the ordinary basis.
The Appellant contends that the Tribunal should have ordered the Respondents to pay the Appellant's costs with respect to each claim. The Respondents resisted the Appellant's appeal and sought to maintain the orders of the Tribunal.

Tribunal Reasons and Orders

The Tribunal commenced its reasons by uncontroversially making an order pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) ("the NCAT Act") dispensing with an oral hearing of the competing costs applications. Each party had filed written submissions with respect to costs.
The Tribunal referred to the provisions governing the costs proceedings, s 60 of the NCAT Act, and Rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) ("the NCAT Rules"). It is not controversial that Rule 38 applied. Rule 38 provides that the Consumer and Commercial Division of the Tribunal may award costs, in the absence of special circumstances required by s 60 of the NCAT Act, if the threshold of $30,000 is exceeded by the amount claimed or in dispute in the proceedings.
The Tribunal identified the competing applications as arising out of residential building work carried out by the Appellant for the Respondents, (paragraph 7). The Tribunal recorded that the Appellant commenced proceedings [HB17/53947] seeking from the Respondents the final progress claim ($40,150) and variations, interest and costs ($43,727.73). The Appellant's points of claim added a further amount to bring the total to $188,133.42, which was maintained until the commencement of the hearing.
The Tribunal recorded that, at the commencement of the hearing before it, the Appellant withdrew claims totalling "just over $97,000" (paragraph 7).
The Appellant secured an order that the Respondents pay it the sum of $71,092.59 (paragraph 8) with respect to its claim in the substantive proceedings. There has been no appeal against that order.
The Tribunal referred to the Respondents' claim [HB18/15261] with respect to building work carried out by the Appellant, which was alleged to be defective and incomplete, and recorded that the Respondents conceded variations totalling $22,121.35, but disputed the balance of the Appellant's claim (paragraph 9). The Respondents claimed an order for payment of $156,017 to rectify and complete works undertaken by the Appellant, and opposed an order that the Appellant undertake the rectification work. The Tribunal ordered the Appellant to undertake rectification work which was valued in the decision in the substantive proceedings at $93,327.66 (paragraph 9).
The Tribunal recorded that both parties claimed to have been successful in the substantive proceedings, and sought that the other party pay its or their costs of the proceedings (paragraph 10). The Tribunal was satisfied that Rule 38 of the NCAT Rules applied as the amount claimed or in dispute on each application was more than $30,000 (paragraph 11). There is no suggestion that the Tribunal erred in so finding.
Under the heading "Was the Builder Successful in its Claim?", the Tribunal referred to the Appellant's original claim for $83,877.73 (paragraph 12), the components of which it had earlier identified (paragraph 7). The Tribunal recorded that "The claim which the homeowners were required to meet right up until the commencement of the hearing was a claim of $188,133.42" in respect of which the Appellant was "only partially successful". The Tribunal noted the submission of the Respondents that they had conceded "all but $7,459.78" of the sum ultimately sought by the Appellant in their points of defence (paragraph 12). The Tribunal further recorded (paragraph 13) that the Appellant had been unsuccessful in its claim for interest.
Under the heading "What Cost Order Should the Tribunal Make on the Builder's Claim?" the Tribunal recorded (paragraph 14) that the Appellant was "partly successful on its claim" but that it "acted unreasonably in making a claim for variations totalling $97,000 which was abandoned on the morning of the hearing". The Tribunal further found that the making of that claim "which did not appear to have merit but which the homeowners had to meet" made a compromise of the Appellant's proceedings "much more difficult". For those reasons, the Tribunal was satisfied that the usual order should not apply, and that each party should pay its or their own costs.
Addressing the Respondents' claims, under the heading "Were the Homeowners Successful in their Claim?", the Tribunal recorded that the Respondents were successful in respect of defects valued at $93,327.66, but were unsuccessful in resisting a work order pursuant to the Home Building Act 1989 (NSW). The Tribunal recorded that it accepted the evidence of the Respondents on all but one of the defects alleged by them. The Tribunal also found that one of the major issues in dispute was the finish of the floors, in respect of which issue the homeowners were unsuccessful.
The Tribunal then addressed "What cost order should the Tribunal make on the homeowners' application?" and found that the Respondents were "largely successful" and that accordingly the Appellant should pay their costs (paragraph 17). The Tribunal took into account that, although the Appellant was successful in obtaining a work order, the order required it to undertake the work in accordance with the Respondents' expert's scope (paragraph 17).
The Tribunal further found (paragraph 18) that, although the Respondents were unsuccessful in respect of the floor, "that matter was arguable" and "their lack of success on that issue was not as a result of any disabling behaviour or because the issue was entirely without merit". The Tribunal was thus not satisfied that the Respondents should be denied an order for costs.

The Appeal

The Appellant appeals pursuant to s 80 of the NCAT Act. The Appellant's Notice of Appeal challenges each of the Tribunal's orders with respect to costs. The Appellant also sought leave to appeal pursuant to s 80(2)(b) of the Act. If the appeal is allowed, the Appellant seeks the orders identified earlier pursuant to s 81(1)(d) of the NCAT Act, which empowers the Appeal Panel to quash or set aside the decision of the Tribunal, and substitute it with "another decision".

The decision in the substantive proceedings

Both parties referred to the reasons for the Tribunal's decision in the substantive proceedings. That decision has not been appealed against. In view of the debate with respect to the success of each party in the substantive proceedings, it is appropriate to refer to the undisturbed findings of the Tribunal which informed its costs decisions.

The Parties' Submissions

The Appellant's Notice of Appeal asserted two errors of law, which are that the Tribunal: 1. Erred in making an order that each party pay its own costs in proceedings HB17/53947 in circumstances where the Appellant had to commence proceedings to recover a retained progress payment and for variations and/or 2. In making an order that the Appellant pay the Respondents' costs in HB18/15261 in circumstances where the Appellant successfully defended an allegation of defective work in relation to a concrete floor, an issue which occupied substantial time and costs.
The Appellant's application for leave pursuant to s 80(2)(b) asserted, in reliance upon the same facts and circumstances as the primary grounds, that the decisions of the Tribunal were not "fair and equitable", and were "against the weight of evidence". The Appellant filed comprehensive written submissions on 28 June 2021 and submissions in reply to the submissions of the Respondents on 24 August 2021.
The Appellant submitted (paragraph 21) that, although the Respondents may have had a basis to retain payment under the contract between the parties, they "did not follow the correct procedure to do so", having elected to retain the final progress payment and the variations being asserted to have been "not appropriate at law". It was thus submitted that "but for the application being prosecuted by the Appellant for which it received the benefit of a Judgment in its favour for the entirety of the progress stage and some variations, those payments would have remained retained. The Appellant had to prosecute these proceedings to recover".
In circumstances where each party agitated claims against the other party, and no findings of fact were made in the terms now relied upon by the Appellant, we do not accept that this complaint can advance its appeal. As suggested elsewhere in these reasons, we do not accept that it is open to the Appeal Panel to "go behind" the undisturbed findings of fact of the Tribunal in the substantive proceedings by reference to which the costs claims were decided.
The Appellant (paragraph 28) relied upon the Respondents having received a "net gain of $7,459.78 pursuant to the Judgment of the Tribunal in the substantive proceedings" (at paragraph 12), but submitted that the Tribunal did not consider (paragraph 28) "that the Appellant was put to the cost of prosecuting the application to recover the final progress claim and variations due to the Respondents' improper retention". The Appellant further submitted that, having been "wholly successful in relation to the progress claim and partially successful in regard to variations", it should be "compensated" with a costs order for the expense of prosecuting that application (paragraph 28).
It was further submitted (paragraph 30), by reference to the decision of the High Court in Oshlack v Richmond City Council [1998] HCA 11, at 134, that at common law a successful party had a "reasonable expectation of being awarded costs against the unsuccessful party, and that "fairness" dictates that the unsuccessful party typically bears liability for costs" (Oshlack at 67).
The Appellant further submitted (paragraph 31) that, other than in special cases, a party is entitled to costs of an issue on which he succeeds (Laguillo v Haden Engineering Pty Limited (1978) 1 NSWLR 306 at 308 and 309).
The Appellant submitted (paragraph 32) that the "starting point ought to have been that the Appellant receive the benefit of an order that the Respondents pay its costs of the Appellant builder's claim".
With respect to the Appellant, we are not greatly assisted by reference to underlying principles with respect to costs at common law, or pursuant to the Civil Procedure Rules 2005 (NSW), in circumstances where, as is not in doubt, Rule 38 of the NCAT Rules applied, the effect of which was that the requirement of "special circumstances" provided by s 60 of the NCAT Act did not apply, and the awarding of costs was discretionary, as the words "may award" makes clear (Samad v District Court of New South Wales (2002) 209 CLR 140). Nor do we understand either party to suggest that the Tribunal misdirected itself in law by finding (paragraph 6) that it could award costs in the absence of special circumstances, and had the discretion "as to whether to make an award of costs but must act judicially", costs being "awarded not to punish an unsuccessful party but to compensate a successful party".
The Appellant submitted (paragraph 33) that, by not awarding costs on the basis that the Appellant "acted unreasonably in making a claim for variations totalling $97,000 which were abandoned on the morning of the hearing and having the effect of making any compromise much more difficult," the Tribunal effectively "exercised the power pursuant to s 60 of the CATA to disentitle (the Appellant) to an order for costs in its favour". We struggle to accept that, in the exercise of its discretion, the Tribunal could not permissibly have significant regard to the reality that, when the hearing commenced, the Appellant abandoned more than half its claim, in the absence of cogent reasons for doing so. No such reasons were advanced by the Appellant.
By reference to the "abandoned claim for variations" the Appellant referred to the reasons of the Tribunal in the substantive proceedings at paragraphs 81 to 83 of 1 May 2020, as amended, and submitted (paragraph 35), that, whilst the variations were abandoned on the morning of the hearing, "they were not matters that incurred substantial costs to address". This was said to be shown by the evidence to which the Appellant then referred, which was submitted to comprise "six paragraphs of lay evidence running for approximately one page in total, eight pages of expert evidence for which several pages are reproductions of contract documents or legal analysis of a contractual position". The Appellant also submitted that "no or no substantial time at hearing having been conceded" was taken up.
It was further submitted (paragraph 35) that "There was substantial time taken in the expert evidence from both parties and at hearing to address the residual variations".
The Appellant asserted (paragraph 36) that the Tribunal exercised its discretion not to award costs "on the premise the abandoned variations made a compromise of the Appellant's proceedings much more difficult" notwithstanding that: "(a) there was asserted to be no evidence or submissions that the Respondents were willing to compromise regarding the disputed variations; (b) the Appellant was required irrespective to prosecute its claim of the progress payment when the Respondents had no basis to retain it; and (c) the Appellant was required to prosecute the remainder of the claim for numerous variations which were numerous to recover payment."
The Appellant submitted that the Tribunal's reliance upon the asserted inability of the Respondents to compromise the proceedings prior to the withdrawal of $97,000 from the claim on the morning of the hearing was "not the proper basis to exercise a discretion against a party to award costs" and "overlooks" the Respondents' retention of payment "when they had no proper basis to do so".
The Appellant reiterated its contention that it received an order for payment of $71,092.59 "being payments the Respondents were not prepared to make voluntarily" thus requiring the Appellant to prosecute the proceedings in order to recover those funds "for which the disentitling conduct was comparatively minor" (paragraph 38).
The Appellant submitted (paragraph 40) that, if the Tribunal concluded that the withdrawal of the variations required a departure from the usual order, a more appropriate order would have been that the Respondents pay the Appellant's costs of the proceedings, except in relation to the abandoned variations in respect of which the Appellant was unsuccessful or, in the alternative, an order for payment of a percentage of the Appellant's costs of the proceedings could have been made (paragraph 41) "to account for the abandoned variations".
It was submitted that, in the circumstances, the Tribunal should have made an order that the Respondents pay 95% of the Appellant's costs. It was thus submitted (paragraph 42) that the Tribunal's decision disentitling the Appellant to its costs of the proceedings produced "an injustice going beyond what is reasonably clear or an error that is plainly, readily apparent and central to the Tribunal's decision such that it would be unjust to allow the order to stand".
With respect to the Respondent owners' claims, the Appellant (paragraph 46) relied upon the failure of the Respondents to secure: 1. a money order from the substantive proceedings; 2. to pursue at hearing any claim for the reasonable cost of alternative accommodation; and 3. to pursue at hearing any claim for interest; and the Appellant being "put to the cost of defending" each of those claims in respect of each of which it was submitted to have been successful.
The Appellant relied significantly upon the "concrete floor" being the most significant "in terms of work, cost of rectification, evidence and the cost of litigation" of the 15 alleged defects relied upon by the Respondent owners (paragraph 48). As is not in doubt, the Appellant was successful in relation to that issue.
The Appellant relied upon the decision of the Court of Appeal in Elite Protective Personnel Pty Limited & Anor v Salmon (No. 2) [2007] NSWCA 373 ("Elite") at 6 and 7 (paragraph 51), which was said to have been followed in Bostick Australia Pty Limited v Lilliard & Anor [2009] NSWCA 304, Tomanovic v Global Mortgage Equity Corporation Pty Limited (No. 2) [2011] NSWCA 256 and Catapult Constructions Pty Limited v Denison (No. 3) [2018] NSWCATAP 277. We apprehend the Appellant's dominant reliance upon Elite was the Court's acceptance that costs will generally be awarded to a "successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed", although "it may be appropriate to deprive a successful party of costs or a portion of costs if the matters upon which that party was unsuccessful took up a significant part of the trial".
We do not understand a proportional costs order to be beyond power or discretion. The issue of proportional costs first assumed significance in the appeal.
The Appellant submitted, in the context of its application for leave to appeal, that the findings of the Tribunal were "not consistent with the weight of evidence" (paragraph 56) and that the finding that the Respondents were largely successful did not "address the comparative time, cost or rectification or the legal costs and disbursements of addressing the concrete floor which was the dominant issue in the proceedings". It was further submitted that, when the time, cost of rectification and legal costs and disbursements of addressing the concrete floor were "properly considered," the Respondents were not largely successful, which "compounded when coupled with the owners' lack of success in relation to a money order for defective work, a money order for alternative accommodation and interest" (paragraph 57).
It was ultimately submitted (paragraph 60) that whilst "mathematical precision is not possible," approaching the proceedings with the "broad brush basis" adopted in Commercial Indemnity Pty Limited [2016] NSWSC 1125, the "appropriate proportional costs order to recognise the Appellant's success in relation to the concrete floor, work order, accommodation and interest would be either: (a) that the Respondents pay the Appellant's costs with respect to the Respondent owners' claim in regard to the concrete floor, work order, accommodation and interest, and that the Appellant pay the Respondents' costs in those proceedings in regard to the residual defects, or (b) that the Respondents pay 75% of the Appellant's costs calculated on the ordinary basis in the Respondent owners' claim proceedings to account for its success, with the 25% deduction in the Appellant's costs recognising the Respondents' costs".
The Respondents' submissions also traversed both the appeal and the Appellant's application for leave to appeal. The Respondents submitted, accurately as oral submissions during the appeal confirmed, that the "gravamen" of the Appellant's challenges asserted that the Tribunal had failed to take into account, or give sufficient weight to, relevant matters. As noted earlier, the Appellant's complaints also embraced the category identified by Heydon JA in Micallef v ICI Australia Operations Pty Limited [2001] NSWCA 274 of taking into account irrelevant matters. The Respondents asserted that neither of the grounds raised by the Appellant, either as purported errors of law without leave, or pursuant to leave, identified a basis for appellate intervention.
Pivotal to the submissions of the Respondent (paragraph 13) was that, as the power to order costs pursuant to Rule 38 of the NCAT Rules is discretionary, a successful challenge to such order required the Appellant to demonstrate error in one of the respects identified in House and reiterated by Heydon JA in Micallef.
The Respondents referred to the Judgment of Middleton JA in BHP Billiton Iron Ore Pty Limited v National Competition Council (No. 2) [2007] FCA 557, at 26 and 27. The Respondents disputed (paragraph 15) the assertion of the Appellant that it had been "successful in its case" in the substantive proceedings. As is not in doubt, the Tribunal found that the Appellant had been partially successful (paragraph 12) in the substantive proceedings. The challenge to that finding was submitted to be "misconceived". The Respondents relied upon the decision in Staniland v Integrity New Home Pty Limited [2017] NSWCATAP 157, in which it was accepted (at [43]) that "inappropriate exaggeration or any cost consequences arising from an inflated claim" were matters that would be relevant to the exercise of any general discretion in the award of costs (paragraph 16).
The Respondents submitted (paragraph 17) that the Appellant's abandonment of $97,000 of its claim, being more than 50% of the claim, on the morning of the hearing was "unreasonable" and properly found to be so by the Tribunal, at paragraph 14 of its decision. With respect to the Appellant's submissions in relation to the quantum of the progress payment and variations, the time in which those payments were to be made and interest on them, the Respondents submitted (paragraph 19) that, of the $71,092.59 awarded to the Appellant on its claim in the substantive proceedings, $63,632.81 was conceded by the Respondents in their points of defence, the Appellant thus having been successful in an additional sum of $7,459.78 or "less than 4% of its claim as pleaded at the start of the hearing" (paragraph 19). The Respondents submitted that the "real issue" for determination in the substantive proceedings was the time for payment, and whether, pursuant to clause 12 of the contract between the parties, that amount could be set off against the amount owed for defects, and not required to be paid until after the contract works and defects had been completed, that being submitted to be an issue on which the Respondents were successful "from a practical point of view".
The Respondents (paragraph 20) submitted that the finding of the Tribunal in the substantive proceedings (at paragraph 84), upon which the Appellant relied, that payment of any monies due under the building contract was to be made at the time of completion of rectification work, though criticised, was never challenged. It was submitted that the Tribunal's finding "negates the thrust of the appeal ground that there was an improperly retained progress payment and (amount for) variations". The Respondents relied upon the fact that the Appellant "lost its claim for interest" (paragraph 21). In summary, the Respondents submitted that, as the Tribunal found, the Appellant was at best only partially successful and that it had exaggerated its claim until the morning of the hearing "by more than double what it ultimately succeeded on". It was accordingly submitted that the decision of the Tribunal with respect to the Respondents' claim was not affected by appellable error.
The Respondents' submissions with respect to the second of the Appellant's grounds of appeal (paragraphs 23 to 27) were, in essence, that the Appellant's reliance upon the Respondents' failure with respect to the concrete floor did not fall within any of the grounds identified in House, or in the later decisions following House to which both parties made reference. As with their submissions with respect to the first ground, the Respondents asserted (paragraph 24) that the decision in Elite is authority for the proposition that costs usually follow the event, even if a party is unsuccessful with respect to a particular issue, but that there are departures from the general rule where an issue was dominant or clearly severable; "then a special costs order may be appropriate", such an order not being "mandatory".
The Respondents relied (paragraph 25) upon the Judgment of Middleton J in BHP, in which His Honour said "Where the Court is considering the question of costs in respect of a lost distinct or severable issue or enquiry, which can clearly be treated as distinct and severable, then to determine whether the successful party will lose some or all of its costs, it will be necessary to consider and weigh up case management principles, the significance of the issue or enquiry and proportion of the proceedings as a whole and whether the issue or enquiry had any relative strength or merit".
The Respondents submitted (paragraph 26) that the Tribunal did "exactly as stated by Middleton J" at paragraphs 17 and 18 of the Tribunal's decision. The Respondents thus submitted that the Appellant failed to demonstrate appellable error.
The Appellant's submissions in reply (paragraph 3) asserted that the Appellant "does not need leave and only sought it for abundant caution". The Appellant reiterated that the Tribunal's finding that the Respondents had a "right to withhold" payment pursuant to the contract was "irrelevant" to the decision which it was called upon to make (paragraph 5), the "point" being that the Respondents disputed the final claim and terminated the contract wrongly without engaging in the contract mechanisms for dispute resolution. That assertedly "sets in chain the recovery process taken by the Appellant" (paragraph 6) who was submitted to have been "ultimately successful in that claim" and for variations which were also disputed by the Respondents. No "disentitling conduct" by the Appellant in prosecuting its claim was submitted to have been found.
The Appellant submitted in reply that the Tribunal "proceeded to ignore the contract and failed to award interest as is set out at clauses 8 and 14 of the contract. This was not appealed, however it points to errors in the judgement and the thinking of the Member. The contract is unambiguous". In oral submissions it was explained by Counsel for the Appellant that a "commercial decision" was made not to appeal against the orders made by the Tribunal in the substantive proceedings.
To the extent that the Appellant's submission in this respect invites the Appeal Panel to "go behind" findings in the primary Judgment which were not appealed against, we do not propose doing so. It would in effect be a collateral attack on those findings and the orders they supported, without the proper procedures to test such a challenge on appeal being followed. We also note that a "commercial decision" and any other reason for not appealing are irrelevant in the face of the decision not to appeal, which is the relevant fact.
The Appellant relied (paragraph 11) on the terms of clause 14 of the contract between the parties which, in essence, provided that, in the circumstances there identified which were submitted to be applicable in the present case, the Appellant was entitled to the payment of interest on the amount outstanding by the Respondents for the "overdue period". As is not in doubt, the Appellant was unsuccessful before the Tribunal with respect to its claim for interest. Again, even if perceived to be commercially sensible not to appeal against the substantive decision in that regard, we cannot accept that, in the present appeal, it is open to the Appeal Panel to go behind the undisturbed findings of fact of the Tribunal for reasons that we have just given.
The Appellant further submitted, in reply, for the first time so far as we are aware, that the decision of the Tribunal had a "bias against the Appellant" or involved a "denial of procedural fairness". Nothing to which we have been referred, expressly or impliedly, establishes either of those propositions, neither of which finds expression in a ground of appeal. No further consideration of these unsupported assertions is called for.
The Appellant referred to the decision in Prendergast v Western Murray Irrigation Limited [2014] NSWCATAP 69, to which the Respondents referred, and submitted (paragraph 13) that the decision "would meet the circumstances in 2, 3, 4, 5, 6 and 7 as set out in the Respondents' submissions". The Appellant submitted (paragraph 14) that Micallef did not "add to the argument" or amplify the principles emerging from House. We need say no more than no doubt surrounds the principles applicable to the present appeal, the issue being whether the Appellant establishes any of the grounds for appellate intervention which emerge from a line of authority which has been consistent for more than eighty years.
The Appellant reiterated its contention (paragraph 16) that, the Respondents having unsuccessfully resisted a work order being made pursuant to s 48MA of the Home Building Act 1989 (NSW) rather than the money order sought by them, was a material absence of success in relation to costs and was not properly taken into account.
In support of its submissions in reply, the Appellant provided a detailed schedule of material from the substantive proceedings. That included witness statements, expert reports and the transcript of the proceedings. In oral submissions, the Appellant submitted that the issues in respect of which the Respondents had been successful represented approximately 36% of the total material which was before the Tribunal, with respect to written and oral evidence.
As is not in doubt, in its written submissions with respect to costs in the Tribunal, the Appellant did not advance the contention advanced on appeal with respect to the proportion of the proceedings taken up by matters in respect of which the Respondents were unsuccessful. Nor did the Appellant there raise the issue of a proportional order for costs. So far as the former contention is concerned, as that contention first raised before us was reliant upon the evidence before the Tribunal, there is no legal impediment to that challenge being agitated (see Metwally v University of Wollongong (No. 2) [1985] HCA 28). So far as the latter contention is concerned, it was not agitated in the submissions before the Tribunal. The proposition that a decision-maker be criticised for not making an order that neither party sought requires careful scrutiny.
The submissions of neither party to the Tribunal advocated a proportional costs order, either as a primary or "fall back" outcome. In those circumstances, we have difficulty accepting that the failure to make a proportional order could constitute an error of law, or a ground for leave, which would enliven appellate intervention. Indeed, in circumstances where neither party sought a proportional costs order before the Tribunal, the making of such an order, without providing the parties with the opportunity to be heard in relation to it, would be likely to constitute a denial of procedural fairness, which would enlivene appellate intervention.
In those circumstances, we propose considering the detailed quantitative submissions of the Appellant on appeal in the context of its application for leave to appeal. We are not persuaded that a decision-maker's failure to consider an outcome for which no party contends raises a question of law.

Consideration

The principles governing the present appeal, both with respect to the grounds of appeal asserting questions of law and those sought to be agitated by leave, are not in doubt, and do not require extensive recital. In Prendergast v Western Murray Irrigation Limited [2014] NSWCATAP 69 at [13], the Appeal Panel suggested a non-exclusive list of "questions of law" which emerge from the authorities. The questions of law are: 1. whether there has been a failure to provide proper reasons; 2. whether the Tribunal identified the wrong issue or asked the wrong question; 3. whether a wrong principle of law had been applied; 4. whether there was a failure to afford procedural fairness; 5. whether the Tribunal failed to take into account relevant i.e. mandatory considerations; 6. whether the Tribunal took into account an irrelevant consideration; 7. whether there was no evidence to support a finding of fact; and 8. whether the decision is so unreasonable that no reasonable decision maker would have made it.
The authorities with respect to appeals against costs orders are considered to be instructive for present purposes. In Waters v P C Henderson (Australia) Pty Ltd [1994] NSWCA 338 ("Waters"), Mahoney JA, with whom Priestley JA and Kirby P agreed, said, at 2.40, that in "determining appeals in relation to costs the courts have traditionally taken the view that unless there be a clear error of principle warranting intervention, the courts will not interfere", such approach involving "considerable good sense", having regard to the costs associated with such appeals. His Honour also observed, at 3.1, that the difficulty in assigning "particular amounts of costs to particular issues", and the difficulty of deciding "in retrospect, how much time was occupied upon one issue or the other or who was the successful party in relation to each of them", in respect of which an appeal court was "in a more difficult situation" than the primary decision-maker, supported appellate restraint.
In Waters, Priestley JA said, at 4.46, the primary judge was "operating in an area where trial judges are left with large discretion; this is for very good reason, amongst others, that, taking the generality of cases, it will be more efficient for the conduct of litigation if detailed examination of costs on appeal is restricted to cases where it is pretty clear that something has gone badly wrong".
Although the reasons of the Tribunal were brief, no ground of appeal asserts that they were "inadequate" as that term is known in law: Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 133. If it is suggested that the Tribunal identified the wrong issue, or asked the wrong question, nothing to which we have been referred persuades us that such was the case. Similarly, nothing to which we have been referred establishes that a wrong principle of law was applied by the Tribunal or that either party was denied procedural fairness.
As counsel for the Appellant's oral submissions confirm, the crux of the grounds of appeal asserting questions of law, and those sought to be agitated by leave, is that the Tribunal failed to take into account relevant considerations, and took into account irrelevant considerations. We turn to examine ingredients of those propositions.
Nothing to which we have been referred establishes that any finding of primary fact of the Tribunal lacked an evidentiary foundation. Nor is it suggested that the decision was so unreasonable that no reasonable decision maker would make it.
So far as the Appellant's claim was concerned, none of the findings of fact recorded by the Tribunal (paragraph 7) has been shown to have been "wrong", or such that the Appeal Panel could substitute its view of them (Edwards v Noble (1971) 125 CLR 296). Importantly for present purposes, it is not in contest that the finding of the Tribunal that the Appellant's withdrawal of claims "totalling just over $97,000" first occurred at the commencement of the hearing was open to it, and not controversial.
As the authorities to which both parties have referred make clear, the "starting point" for the consideration of costs pursuant to Rule 38 of the NCAT Rules, is whether a party has been "successful". The Tribunal directed itself to this issue and found (paragraph 12) that out of a claim which, until the commencement of the hearing, was in the sum of $188,133.42, in respect of which an order for $71,092.59 was made, "all but $7,459.78 had been conceded" by the Respondents in their points of claim, well prior to the hearing in the Tribunal. As the Tribunal also recorded (paragraph 13), the Appellant was unsuccessful in its claim for interest. The Tribunal's finding that the Appellant was "partly successful on its claim" to the extent which it had earlier identified, was counterposed to its finding that the Appellant had acted unreasonably in making a claim for variations totalling $97,000 which was abandoned on the morning of hearing (paragraph 14). In our view, that finding was amply open to the Tribunal.
For our purposes it is unnecessary to speculate about the correctness of the Tribunal's finding that this claim "did not appear to have merit". It is undoubtedly correct however that, until it was abandoned at the commencement of the hearing, the Respondents were obliged to take that claim seriously and, as the Tribunal recorded, "meet" it. That was in our view a factor which was relevant to the Tribunal's determination of the Appellant's claim for costs with respect to its claim against the Respondents. If we are wrong, and the evidence did not permit the Tribunal to take this factor into account, we are not persuaded that doing so vitiated the exercise of the Tribunal's discretion.
To the extent that the Appellant complained that the Tribunal's finding that the late withdrawal of the claim for $97,000 "made a compromise of the builder's proceedings much more difficult" was not supported by any relevant evidence, it is self-evident that, the Appellant's claim having been increased from $83,877.73 to $188,133.42, and having remained at that sum until the commencement of the hearing, the Respondents had to "take it seriously" until it was abandoned. It was open to the Tribunal to infer that the Appellant's almost doubling its claim could be interpreted by the Respondents as indicative of an absence of enthusiasm for compromise and, additionally, to infer that the range for potential compromise was substantially shifted upwards. It was always open to both parties to improve the chances of a costs award by making offers in accordance with Calderbank v Calderbank (1975) 3 All ER 333. Neither party made any such offer. We do not accept that the Tribunal's discretion miscarried as a result of considering this matter. If we are wrong, and the evidence did not permit the Tribunal to take this factor into account, we are not persuaded that doing so vitiated the exercise of the Tribunal's discretion.
The Tribunal was undoubtedly exercising a broad discretion with respect to costs. In our view it has not been established that the Tribunal erred in finding that the Appellant was "partly successful" with its claim. The withdrawal of more than half the Appellant's claim at the commencement of the hearing, the recovery of only $7,459.78 of its claim which was disputed at the hearing, and the rejection of its interest claim amply supported the Tribunal's finding that the Appellant had been partly successful. In reality, the Appellant was more unsuccessful than successful with its claim. Nothing to which we have been referred establishes that the Tribunal erred in refusing the Appellant's claim for the costs of its application.
It remains to consider the appeal against the order for costs of the Respondents' application. The Tribunal identified (paragraph 9) that the Respondents' claim had two components, first, an order for $156,017 to rectify and complete the works, and, secondly, that the Appellant pay that sum to them, and they then undertake the work. The Respondents were undoubtedly unsuccessful in relation to the latter issue. The Tribunal ordered the Appellant to undertake rectification work valued in the decision at $93,327.66, approximately $64,000 less than the sum claimed by them.
The Tribunal then posed the question "Were the homeowners successful in their claim?" and recorded that the Respondents were successful in respect of defects valued at $93,327.66, and were unsuccessful in resisting a work order. The Tribunal recorded that it accepted the expert evidence of the Respondents "on all but one of the defects" (paragraph 15). A major issue in dispute, the finish of the floor, was the defect claim in which the Respondents were unsuccessful (paragraph 16).
The Tribunal found that the Respondents were "largely successful", and took into account that "whilst the builder was successful in obtaining a work order, that order required it to undertake the work in accordance with the homeowners' expert scope" (paragraph 17). The Tribunal noted that the Respondents were unsuccessful with respect to the floor, but that matter was "arguable, and their lack of success on that issue was not as a result of any disabling behaviour or because the issue was entirely without merit". The Tribunal was thus not satisfied that it should affect the Respondents' entitlement to a costs order.
As noted earlier, the Appellant did not assert before the Tribunal that a proportional costs order should be made if, contrary to its primary position, the Appellant was not awarded costs with respect to the Respondents' claim in the substantive proceedings. As the written and oral submissions of the Appellant make clear, the linchpin in its case before the Appeal Panel is that, contrary to the finding of the Tribunal, the Respondents were not "largely successful" in the substantive proceedings.
The written submissions of the parties with respect to the costs dispute before the Tribunal were provided to the Appeal Panel by the Appellant's solicitors on 25 August 2021. The Appellant's written submissions dated 26 May 2020 were subsequently provided to the Apeal Panel.
The Appellant's submissions dated 26 May 2020 asserted (paragraph 25) that it had been "successful overall with the Practical Outcome" of the substantive proceedings, and that, accordingly, the "starting point" was that it should be awarded costs. Although submitting (paragraph 26) that "if the Tribunal is not minded to make an order on the "Practical Outcome" basis, Pregard submits consideration should be given to a proportional costs order", the Appellant did not seek such an order, or suggest what proportion of its costs should be awarded, or provide any supporting analysis for such a suggestion.
The Respondents' submissions dated 9 June 2020 (paragraphs 6 to 13) emphasised their success with respect to 14 out of 15 items of allegedly defective work, the concessions asserted to have been made in that regard by the Appellant's expert during the hearing, their successful resistance of the Appellant's statutory warranty defence claim, the Tribunal's preference for their expert's evidence with respect to all but one rectification item, it ultimately being submitted that the Respondents had been "successful for $88,523.01 more than the Builder conceded".
The Appellant's written submissions dated 30 June 2020 (paragraphs 9 and 10) emphasised the "hotly contested" issue of the work order, which represented "a significant win for the builder". The Appellant submitted that "a mere review of the value of the defects and the time taken to explore each would militate for the builder being awarded costs". Significantly, having regard to the contentions of the Appellant in the appeal, and the reliance upon the tables provided with the Appellant's submissions in reply, the Appellant submitted to the Tribunal that the Appellant "does not enter into that analysis as it is contrary to the authorities cited in the primary submission".
In Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 68, upon which the Appellant relied, the general approach of "overall success" rather than a consideration of individual issues was endorsed. In Avopiling Pty Ltd v Bosevski [2018] NSWCA 219, upon which the Appellant also relied, the evaluation of success by reference to the "practical outcome" of the proceedings was endorsed.
In Firebird Global Master Fund II Ltd v Republi of Nauru (No 2) [2015] HCA 15, French Cj, Kiefel, Nettle and Gordon JJ observed, at 6, that the "preferable approach" with respect to costs should apply when "it may not be said that the event of success is contestable, by reference to how separate issues have been determined", unless there were "special circumstances to warrant a departure from the general rule". Their Honours suggested that there were "good reasons not to encourage applications regarding costs on an issue-by-issue basis, involving apportionments based on degrees of difficulty of issues, time taken to argue them and the like".
As we have earlier recorded, the very detailed "summary of documents" provided by the Appellant in its submissions in reply in the appeal was not advanced in support of the Appellant's submissions with respect to costs in the Tribunal. As we have also earlier recorded, no part of the costs dispute before the Tribunal necessitated a consideration of proportional costs orders, or the kind of analysis which was advanced by the Appellant in the appeal. The case of each party before the Tribunal was that costs should be "all or nothing".
As is not in doubt, neither party was entirely, overwhelmingly nor predominantly successful with respect to its or their substantive claims. In our view, and as the Tribunal's undisputed findings of primary fact confirm, in neither of the substantive proceedings was either party successful "as a whole" (Markinsky v Zammit [2016] NSWCATAP 253, at 29). As invited to by the submissions of both parties, the Tribunal attempted to "differentiate between particular issues" in order to determine the balance of success and failure of the parties' substantive claims. Whilst the Appellant challenges the result of that evaluative determination, the approach taken by the Tribunal has not been challenged.
The matters in respect of which either party succeeded or failed in the substantive proceedings were identified, and were considered by the Tribunal. No irrelevant matter was considered. The Tribunal found that the Respondents had been "largely successful". Although other findings may also have been open to it, we are not persuaded that the Tribunal was wrong in making that finding within the range of available exercises of discretion. No ground of appeal asserts that the Tribunal erred in law by finding that the Respondents having been "largely successful" in the substantive proceedings enlivened the discretion to award costs pursuant to Rule 38 of the NCAT Rules.
For the reasons recorded above, we are not persuaded that the appeal against the costs order in favour of the Respondents should be disturbed. It remains to consider the Appellant's application for leave to appeal.

Leave to Appeal

The principles governing the Appellant's application for leave to appeal from a decision of the Consumer and Commercial Division of the Tribunal are not in doubt, and were summarised in Collins v Urban [2014] NSWCATAP 17 ("Collins"). As the Appeal Panel noted (at [81]), to obtain a grant of leave the Appellant must satisfy the requirements of clause 12 of Schedule 4 of the NCAT Act, and persuade the Appeal Panel that leave should be granted pursuant to s 80(2)(b) of the Act. The expression "may have suffered a substantial miscarriage of justice" in clause 12 was considered in Collins (at [65] to [79]), and accepted to entail a "significant possibility" of a more favourable result having been achieved if any of the grounds articulated in clause 12 was made out.
The Appellant contends that it may have suffered a substantial miscarriage of justice because the decision of the Tribunal was "not fair and equitable" (rule 12(1)(a)) or was "against the weight of evidence" (rule 12 (1)(c)).
The consideration of "decision not fair and equitable" in Collins does not materially advance matters for present purposes. With respect to the Appellant's weight of evidence ground, the Appeal Panel in Collins recorded at [77(2)] that the authorities establish that a decision under appeal can be held to be "against the weight of evidence" where "the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach".
By reference to Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10, the Appeal Panel recorded (at [84]) that, in order to be granted leave to appeal, an applicant must demonstrate "something more than that the primary decision-maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact". Of the matters identified as those in which "ordinarily it is appropriate to grant leave to appeal", the appellant relied upon the matters articulated in Collins at [84(2)(c) and (d)], being "an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or 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" and "a factual error that was unreasonably arrived at and clearly mistaken" respectively. We proceed on the basis that, if the Appellant establishes an "injustice" in those terms, the ground provided by clause 12(1)(a) would be made out, and leave to appeal granted.
As noted earlier, the Appellant's submissions in the appeal were relied upon in support of its application for leave to appeal. The submissions of the Respondent were also relied upon in opposition to the leave application. Our consideration of the parties' submissions in the appeal informs our determination of the Appellant's leave application.
The primary facts by reference to which the Tribunal exercised its discretion have been largely unchallenged in the appeal. To the extent that challenges to such findings of primary fact require the Appeal Panel to "go behind" undisturbed findings in the substantive proceedings, as we have earlier recorded, we are not prepared to do so. As also earlier recorded, we are not persuaded that the Tribunal either failed to have regard to any relevant fact or circumstance, or had regard to irrelevant facts or circumstances. Although not so expressed, we perceive from its terms that the real thrust of the Appellant's "not fair and equitable" complaint is that the Tribunal gave insufficient or excessive "weight" to findings of primary fact which were open to it, or which have not been disturbed on appeal. The obstacles to success of such challenges are not in doubt, and do not require reiteration (Gronow v Gronow (1979) 144 CLR 513). With respect to the Appellant, the matters advanced in support of its contention that the orders of the Tribunal were not "fair and equitable", at their highest, establish that the Tribunal may have made different decisions with respect to the costs proceedings, or been "arguably wrong" in the conclusion arrived at by it.
We have earlier dealt with the particulars of the Appellant's "not fair and equitable" challenges. The Tribunal took into account that the Respondents were unsuccessful in respect of the floor (paragraph 18). This was clearly a relevant consideration. Nothing to which we have been referred establishes that the "matter" of the floor was not arguable, or that the lack of success of the Respondents with respect to that issue resulted from any "disabling behaviour" or because the issue was "entirely without merit". Significantly, the Appellant has not referred us to any finding of fact in the substantive decision of the Tribunal in support of any contention that these findings or inferences of the Tribunal were wrong.
We are unable to accept that the Tribunal's not making a "proportionate costs order" with respect to either costs claim, for which neither party contended, was "not fair and equitable".
In our reasons in the appeal, and our reasons with respect to the Appellant's "not fair and equitable" challenge, we have explained why we are unpersuaded that the Appellant's "weight of evidence" challenge has merit. At most, the Appellant establishes that other findings may have been open to the Tribunal, or more than the possibility that the Tribunal was "arguably wrong" in the conclusion it arrived at.

Conclusion

For the reasons recorded above, we are not persuaded that the appeal has merit, or that leave to appeal should be granted. As discussed with counsel at the conclusion of the hearing of the appeal, we will provide the opportunity for any party seeking an order for costs to make written submissions not exceeding 5 pages in length within 7 days of our order, with a corresponding period in which the party resisting such application may make written submissions not exceeding 5 pages in length. Pursuant to s 50(2) of the NCAT Act, we shall dispense with an oral hearing of those applications.

Order 1. Leave to appeal is refused; 2. The appeal is dismissed; 3. Any party seeking an order for costs of the appeal file and serve submissions in support of such application not exceeding five pages in length within seven days; 4. Any party opposing an application for costs of the appeal file and serve submissions in support of such opposition not exceeding five pages within fourteen days.

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: 20 October 2021

Civil and Administrative Tribunal Act 2014(NSW)

Civil Procedure Rules 2005(NSW)

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Judgment (11 paragraphs)

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