This decision relates to the costs of an appeal I dismissed after determining it on the papers. In short, I found that the appellant's long delay and the lack of any apparent merit in the appeal, due to the appellant's inability to demonstrate he had a right to claim the relief he sought under the Home Building Act 1989 (NSW), meant that an extension of time was not warranted. These reasons assume familiarity with that decision: Qui v Balmoral Street Developments Pty Ltd [2023] NSWCATAP 60 ("Appeal Decision").
The respondent seeks its costs of the appeal, primarily on the basis of a prima facie intent such costs follow the event where the amount in dispute exceeded $30,000 in the proceedings at first instance and the appeal, but also on the secondary basis that there are special circumstances warranting such an award.
I have decided the issue can be determined on the material lodged by the parties without an oral hearing and will order the appellant to pay the respondent's costs on the ordinary basis.
[2]
The relevant provisions governing costs
Section 60 of the Civil and Administrative Tribunal Act 2013 (NSW) ("Act") deals with the usual position as to costs:
60 Costs
(1) Each party to proceedings in the Tribunal is to pay the party's own costs.
(2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs.
(3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following -
(a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,
(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,
(c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law,
(d) the nature and complexity of the proceedings,
(e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,
(f) whether a party has refused or failed to comply with the duty imposed by section 36 (3),
(g) any other matter that the Tribunal considers relevant.
(4) If costs are to be awarded by the Tribunal, the Tribunal may -
(a) determine by whom and to what extent costs are to be paid, and
(b) order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis.
(5) In this section -
costs includes -
(a) the costs of, or incidental to, proceedings in the Tribunal, and
(b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal.
Rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) ("Rules") varies the position in s 60 of the Act in respect of costs in the Consumer and Commercial Division of the Tribunal in certain circumstances, and relevantly provides:
38 Costs in Consumer and Commercial Division of the Tribunal
(1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal.
(2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if -
…
(b) the amount claimed or in dispute in the proceedings is more than $30,000.
Rule 38A of the Rules deals with costs in internal appeals, and provides:
38A Costs in internal appeals
(1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of -
(a) enabling legislation, or
(b) the Division Schedule for the Division of the Tribunal concerned, or
(c) the procedural rules.
(2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.
As was determined in Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25, the "amount claimed" or the "amount … in dispute" in both the proceedings at first instance and the appeal must exceed $30,000 before r 38A of the Rules takes effect and alters the usual position set out in s 60 of the Act in respect of the appeal.
Each application for costs must be determined on its own merits and the central and overriding principle in any decision as to costs is that of doing justice between the parties in each particular case: Moseley v AB (No 2) [2017] NSWSC 1812 at [65] - [66].
The effect of r 38A, where it is engaged, is to provide "a wide discretion to make an order for costs." It does not specify the factors that must be taken into account in exercising the discretion, although the discretion to make such an order must be exercised judicially: Carlson v ARA Engine Reconditioning Pty Ltd (No 2) [2020] NSWCATAP 39 (Carlson) at [32].
The starting point where proceedings have been heard and determined on the merits and r 38A applies is the common law principles that costs follow the event as "the purpose of making a costs order is to provide compensation to the party in whose favour the order is made for the expense the party has been put to in prosecuting or defending legal proceedings." Carlson at [33].
"Special circumstances" are circumstances that are out of the ordinary, but need not be exceptional or extraordinary: Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 at [60] (Santow J); Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]. Even if satisfied that there are special circumstances, the Appeal Panel must further be satisfied that they are circumstances "warranting an award of costs": Fitzpatrick Investments Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 103 at [21].
An order for costs is not made for the purposes of punishing the unsuccessful party but for the purpose of providing a part indemnity to the successful party for their costs incurred: see Oshlack v Richmond River Council 193 CLR 72; [1998] HCA 11.
In determining whether there are special circumstances warranting an award of costs, I may have regard to the matters set out in s 60(3) of the Act.
[3]
Is r 38A of Rules engaged?
The respondent says r 38A is engaged and costs should follow the event. It refers to my findings that the appellant initially sought an amount of $37,613 in his application at first instance and failed to make good his assertion that he had sought to amend his claim to an amount less than $30,000: Appeal Reasons at [37].
It says that, since the appellant challenged the decision to dismiss his claim at first instance and sought redress as set out in that application in the appeal, the appeal likewise relates to an amount claimed or in dispute exceeding $30,000.
[4]
Special circumstances warranting an award of costs?
If rr 38 and 38A had not been engaged and s 60 of Act applied, the respondent says that costs should be awarded, nonetheless. It says the appellant failed to engage with the Tribunal's finding that he had no standing to claim against it under the Home Building Act, meaning the appeal was misconceived or lacking in substance. It also says the extensive delay in lodging the appeal and the fact that the appellant's claim was, even on his own version, over $29,000 contributes to there being special circumstances warranting an award of costs.
[5]
The appellant's submissions
The appellant sets out the hardship he has experienced as a result of his recent poor health. He maintains that he sought to reduce his claim to an amount less than $30,000 at first instance, but has lodged no further evidence to support that claim.
Otherwise, he says that the respondent was tardy in complying with directions in both the proceedings at first instance and in the appeal.
[6]
Determination
I am satisfied that r 38A of the Rules is engaged, and that costs should follow the event.
The Tribunal's finding that the appellant sought more than $30,000 in the proceedings at first instance remains undisturbed. In respect of the appeal, even if it could be argued that the appellant's claim had been reduced to just under $30,000, he also challenged the Tribunal's order that the respondent have its costs. Despite the respondent lodging no evidence in that regard, I can safely infer the respondent's costs would exceed $1,000 in the proceedings at first instance, meaning the amount claimed or in dispute in the appeal was also in excess of $30,000.
Whilst I have sympathy for the appellant's health conditions, and their impact on him, he lodged no evidence of his financial circumstances being affected by those conditions other than an assertion, which I accept, that he was unable to work for an extended period. It was evidence of his financial circumstances and how an order may impact on him which may have been relevant to the exercise of my discretion in his favour. Nor did the respondent's delay in lodging material in the appeal, which was remedied by orders for extensions of time, rise to conduct which should disentitle it to an award to partially compensate it for its costs incurred.
[7]
Orders
My orders will be:
1. A hearing of the application for costs is dispensed with.
2. The appellant is to pay the respondent's costs of the appeal on the ordinary basis as agreed, or failing agreement as assessed.
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
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Decision last updated: 05 April 2023