Profitability Consulting Pty Ltd v Thorpe

NCAT Appeal Panel|2018-02-08

REASONS FOR DECISION

En route to Sydney from their home on the NSW Victorian border to participate in the hearing of an appeal, the respondents, Joanne Thorpe and Arthur Peterson received notice that the appellant, Profitability Consulting Pty Ltd had decided to withdraw the appeal. The respondents, who were self-represented, now seek an order for out-of-pocket expenses they incurred to attend the aborted appeal hearing.
In an application lodged in the NSW Civil and Administrative Tribunal in May 2017, the first respondent, Ms Thorpe had sought orders under the Agricultural Tenancies Act 1990 (NSW) that the appellant refund fees and commissions totalling about $6,600. Ms Thorpe later increased the amount sought to just under $30,000. By letter dated 31 July 2017, solicitors for Profitability Consulting Pty Ltd, the respondent in the first instance proceedings and the appellant in the appeal, requested NCAT to permit it to be legally represented in the proceedings, to extend the time for filing and serving evidence and submissions, and to adjourn the date of hearing. When the Tribunal refused to make the orders sought, Profitability appealed that decision. On the eve of the hearing, Profitability withdrew the appeal against that decision.
These reasons address a subsequent application made by the respondents for an order for costs in the sum of $1,167. The application relates to out-of-pocket expenses (child care, travel and accommodation) incurred by the respondents in attending the appeal. For the reasons that follow I find that none of the items the subject of the respondents' costs application constitute "costs" within the meaning of s 60 of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act), and that therefore the application must be refused.

Method of determining of the costs application

On 17 October 2017, the Appeal Panel (differently constituted) invited the parties to comment on whether, in determining the respondents' costs application, the power conferred by s 50(2) of the NCAT Act, which permits the Appeal Panel to make an order dispensing with a hearing, should be exercised. Each party consented to the costs application being determined "on the papers". Being satisfied that, by considering their written submissions, the issues for determination can be adequately determined in the absence of the parties, I decided to exercise the power to dispense with a hearing: s 50(2) of the NCAT Act.

Applicable costs rule

Section 60 the NCAT Act provides that each party to proceedings in the Tribunal is to pay their own costs. The Tribunal has a discretion to award costs but only if it is satisfied that there are "special circumstances" warranting an award of costs: s 60(2) of the NCAT Act.
Section 60 of the NCAT Act is subject to the Civil and Administrative Tribunal Rules 2014 (the NCAT Rules): s 35 of the NCAT Act. The NCAT Rules provide that where proceedings are brought in the Consumer and Commercial Division of NCAT, and the amount claimed or in dispute in those proceedings is more than $30,000, the Tribunal may award costs even in the absence of special circumstances: r 38(2)(b) of the NCAT Rules.
In this matter, the amount claimed and in dispute at both first instance and in the appeal, was less than $30,000. Therefore the applicable costs provision is s 60 of the NCAT Act.

The type of costs recoverable under s 60 of the NCAT Act

The central issue for determination is whether the expenses sought by the respondents in their application for costs are recoverable under s 60 of the NCAT Act. 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: … (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.
Citing Cachia v Hanes (1994) 179 CLR 403; [1994] HCA 14 (Cachia) in support of its submissions, Profitability Consulting contends that the type of expenses the respondents seek to recover do not amount to costs within the meaning of s 60 of the NCAT Act and that therefore it is not open to the Appeal Panel to award costs, even if satisfied that special circumstances are established. The respondents disagree and submit that the term "costs" should be given its ordinary meaning and not the narrow meaning Profitability Consulting urges the Appeal Panel to adopt. They argue that each of the items on which their application for costs is based are "costs of or incidental to the appeal" and therefore costs within the meaning of s 60(5) of the NCAT Act.
The meaning of the term "costs" in s 60 of the NCAT was considered by an Appeal Panel in Hammond v Ozzy's Cheapest Cars Pty Ltd t/as Ozzy Car Sales [2015] NSWCATAP 65 (Hammond). Noting that the term "costs" is not defined in the Act, apart from the "inclusive illustrations in s 60(5)", the Appeal Panel held at [107] that the word "costs" in s 60 refers to "the types of costs recoverable in legal proceedings and that the legal principles relating to what 'costs' may be ordered by a Court to be paid apply in relation to the Tribunal, except to the extent that they are modified by the Act or other applicable legislation". The Appeal Panel concluded at [107], [108]: Accordingly, "costs" that the Tribunal can order to be paid under s 60(2) will not include compensation for time spent by a litigant who is not a lawyer in preparing and conducting his or her case: Cachia v Hanes (1994)179 CLR 403 at 409. In Cachia, the High Court explained the position as follows at 410-411: This is hardly surprising. It has not been doubted since 1278, when the Statute of Gloucester ((30) 6 Edw.I c.1.) introduced the notion of costs to the common law, that costs are awarded by way of indemnity (or, more accurately, partial indemnity) for professional legal costs actually incurred in the conduct of litigation. They were never intended to be comprehensive compensation for any loss suffered by a litigant. As Coke observed of the Statute of Gloucester, the costs which might be awarded to a litigant extended to the legal costs of the suit, "but not to the costs and expences of his travell and losse of time" ((31) Coke, Second part of the Institutes of the Laws of England at 288. See also Howes v. Barber [1852] EngR 15; (1852) 18 QB 588 at 592 [1852] EngR 15; (118 ER 222 at 224); Dowdell v. The Australian Royal Mail Co. (1854) 3 El and Bl 902 at 906 [1854] EngR 604; (118 ER 1379 at 1381).).
The President of the Victorian Civil and Administrative Tribunal, Morris J, took a different approach to the applicability of Cachia, in Aussie Invest Corporation Pty Ltd v Hobsons Bay CC [2004] VCAT 2188 (Aussie Invest). In that decision, Morris J considered whether the costs sought by an objector to a planning decision for her lost wages and travelling expenses incurred in attending a hearing were recoverable. The Victorian Civil and Administrative Tribunal Act 1998 (VIC) gave VCAT the power to award costs in "special circumstances" but did not define the term "costs". His Honour wrote at [13] that the decision in Cachia "has sometimes been regarded as an obstacle to the tribunal awarding costs to an unrepresented party", and opined that Cachia has often been applied "without a proper understanding of the facts upon which the decision was made, which are fundamentally different than those which apply to this tribunal". His Honour wrote: 14 In Cachia the High Court was concerned with circumstances where the appellant had been awarded costs in proceedings in the Supreme Court of New South Wales in which the appellant had not been legally represented. On taxation of the appellant's bill of costs he claimed compensation for the loss of his time spent in the preparation and conduct of his case and for out of pocket expenses, being travelling expenses. These claims were disallowed. Ultimately the High Court confirmed the decision disallowing these costs. The principal judgment of the Court made the following comment in the context of the Rules of the Supreme Court of New South Wales: It is fundamental to the appellant's argument that the time he lost in preparing and conducting his case constitutes "costs" within the meaning of this rule. He is, however, unable to sustain that proposition. The "costs" provided for in the rules do not include time spent by a litigant who is not a lawyer in preparing and conducting his case. They are confined to money paid or liabilities incurred for professional legal services. It is only in that sense that the rule speaks of "costs". 15 In Cachia the High Court observed that since the introduction of the Statute of Gloucester in 1278 the notion of cost was intended to apply to only professional legal costs actually incurred in the conduct of litigation. The High Court noted that Coke had observed of the Statute of Gloucester that the costs which might be awarded to a litigant extended to the legal costs of the suit, "but not to the costs and expenses of his travell and losse of time". 16 But costs are ultimately a matter that turns on the interpretation of a statute. And it might be thought that things have moved on since 1278. 17 Whatever may be the case in the Supreme Court of New South Wales, it does not automatically apply to proceedings before the Victorian Civil and Administrative Tribunal. The circumstances of the tribunal are clearly much different. Hence it is necessary to consider the matter by reference to the constitution, purpose and practices of the tribunal. Applying this method, the decision of the High Court in Cachia is inapplicable.
The approach taken by Morris J in Aussie Invest was followed in a number of decisions made by one of NCAT predecessor tribunals, the Administrative Decisions Tribunal. See, for example, B & L Linings Pty Ltd & anor v Chief Commissioner of State Revenue (No 4) (RD) [2008] NSWADTAP 14 at 87; Blanch v Chief Commissioner of State Revenue [2008] NSWADT 24 at 39. However, in the main, like the Appeal Panel in Hammond, the ADT interpreted the word "costs" to mean legal costs. See, for example, Dingwall v Matar & Anor [2002] NSWADT 52 at [13]; Raethel v Director-General, Department of Education and Training [2000] NSWADT 56 at [35], [36]; Director-General, Department of Education and Training v Simpson [2001] NSWADTAP 6 at [7]. Contained in the now repealed Administrative Decisions Tribunal Act 1997 (NSW), the provision giving the ADT the power to make costs was in similar but not identical terms to s 60 of the NCAT Act.
While the reasoning in Aussie Invest is at first glance attractive, I am, nonetheless, not persuaded that the term costs in s 60 of the NCAT Act should be given the broad meaning adopted by Morris J. In reaching that conclusion, in addition to the reasons given in Hammond, I consider the following to be relevant.
First, as observed by the majority in Cachia at [11], costs are awarded by way of partial indemnity for professional legal costs actually incurred in the conduct of litigation and were never intended to be comprehensive compensation for any loss suffered by a party in litigation such as the expenses of travel and loss of time.
Second, interpreting the term costs to mean legal costs is consistent with the meaning of the term costs in s 60(4) of the NCAT Act: (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.
The "legal costs legislation" referred to in s 60(4)(b) of the NCAT Act, includes Part 4.3 of the Legal Profession Uniform Law (NSW). Division 7 of Part 4.3 of the Legal Profession Uniform Law (NSW) governs the assessment of legal costs. Section 6 of that Act defines the term "legal costs" to mean: (a) amounts that a person has been or may be charged by, or is or may become liable to pay to, a law practice for the provision of legal services; or (b) without limitation, amounts that a person has been or may be charged, or is or may become liable to pay, as a third party payer in respect of the provision of legal services by a law practice to another person-- including disbursements but not including interest.;
It would be anomalous if s 60 of the NCAT Act permitted the Tribunal to award expenses that do not fall within the definition of legal costs in the Legal Profession Uniform Law (NSW), but nonetheless permitted the Tribunal to order that those "costs" be assessed under that Act.
While rebuttable, it is a general rule of statutory construction that, where a word is used consistently in a single piece of legislation, it should be given a consistent meaning unless there is reason to do otherwise: Registrar of Titles (WA) v Franzon [1975] HCA 41; (1975) 132 CLR 611 at 618; [1975] HCA 41; D 151, D152, D154 v New South Wales Crime Commission [2017] NSWCA 143 at [72]. No reasons have been advanced which might support the proposition that the words "costs" in s 60(2) of the NCAT, which gives the Tribunal the power to award costs, should be given a different meaning to the same word in s 60(4)(b) of the NCAT Act..
Finally, if the general approach to awards of costs in litigation were to be varied in NCAT from that which applies in courts, it is likely that this would be made plain in the NCAT Act. Insofar as a variation is expressed, it narrows rather than broadens the principles relating to costs. That is evident from the fact that the default position in most cases is that parties in the NCAT will bear their own costs.

Do the out-of-pocket expenses claimed by the respondents constitute disbursements?

A self-represented party can recover expenses that they would have been able to recover had they been represented: Farquar & Farquar (No. 2) [2008] FamCA 682 at [8].
In Dal Pont, Law of Costs, (LexisNexis Butterworth, 3rd ed, 2013) at 1.8, the nature of a disbursement was described as: [A] payment made on behalf of a client. ... Essentially disbursements refer to money which, for the purposes of the ... proceeding, have been actually paid out to other people, such as witnesses, counsel, professional advisers and so forth, and so can be distinguished from "costs" ... that are intended to cover remuneration for the exercise of professional legal skill by a lawyer. ... Expressed another way, these types of disbursements ... are money paid on behalf of a client of a lawyer to a third party that can properly be included in the bill of costs.
None of the expenses the subject of the respondents' application - namely child care, travel and accommodation expenses - would be recoverable as disbursements had the respondents been legally represented. It follows that an award for costs cannot be made under s 60 of the NCAT Act.
It is unfortunate - and it may even be considered in some sense unjust - that the appellant put the respondents to unnecessary inconvenience and expense. Nonetheless, I find no warrant in the general principles relating to costs, nor in the legislation and rules, give the term of 'costs' the broad meaning the respondents urge me to adopt.
The application for costs must be refused.

Order 1. Application for costs is refused.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar

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: 08 February 2018

Administrative Decisions Tribunal Act 1997(NSW)

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