Rawlinson v Al Masri

SUBMISSIONS

1. The Tribunal is satisfied that the parties have been afforded an opportunity to make submissions about the proposed order to dispense with a hearing and to determine the costs application on the papers.
2. The applicant made no submissions in regard to the proposal of the Tribunal to dispense with a hearing as to the costs application.
3. The issue of costs can be adequately determined in the absence of the parties by consideration of the written submissions lodged with or provided to the Tribunal and the Tribunal will take those submissions into account.
4. Pursuant to Section 50(4) the Tribunal exercises its discretion to determine the application on the papers.

Respondent's submissions

1. The respondent seeks a costs order against the applicant on an indemnity basis.
2. The applicants claim was for damages in the amount of $42,510.00 for alleged defective tiling work done by the respondent.
3. The respondent submits that section 60(2) applies if special circumstances warrant an award of costs. In considering if special circumstances apply the Tribunal must have regard to section 60(3) of CATA.

Special Circumstances No tenable basis in law-s60(3)(c)

1. The finding by the Tribunal that: 1. The respondent was not the proper respondent: see [48]; 2. There was no contract between the applicant and the respondent: see [47]; and 3. The respondent did not owe the applicant a duty of care: see[49]; Support a finding that there was no legal basis on which the applicant could succeed. No Tenable basis in fact-s60(3)(c)
2. The Tribunal found at [46]-[47] the applicant had failed to discharge the burden of proof with respect to her allegations that the tiling work was defective and the cause of the loss that she complained of. The "expert" reports relied upon by the applicant were not accepted by the Tribunal and on the unchallenged evidence before the Tribunal the respondents work was neither inadequate or the cause of the applicant's loss.
3. The volume of evidence relied upon by the applicant was largely improbable in light of objective factual circumstances and was deficient and incapable of supporting the allegations made by her. Proceedings unnecessarily disadvantaged the respondent
4. The applicant refused to comply with the direction of the Tribunal made on 15 August 2016 by allowing the respondent and his expert witness access to her property to carry out an inspection of the alleged defective works. It was not until a week before the hearing that the applicant allowed the respondents expert access to the property to carry out his inspection. Unreasonable refusal of the respondent's offer of compromise-s60(3)(g)
5. On 25 November 2016 the respondent's solicitor sent an offer of compromise to the applicant in the form of a Calderbank v Calderbank [1973] 3 All ER 333, in the following terms: 1. The applicant's claim be dismissed; 2. The respondent undertakes to waive any rights to payment from the applicant in respect of tiling work done by the respondent at the applicant's property; and, 3. Each party to bear their own costs
6. The terms of the offer of compromise were unreasonably rejected by the applicant as the terms of the offer were more favourable than the result of the proceedings that the applicant obtained.

Applicant Submissions

1. The applicant's only submission is that contained in her email of 22 August 2017. That extent of that submission is that she has "nothing to answer".
2. The applicant has been given an opportunity to respond to the respondent's submissions and has not placed before the Tribunal anything in answer to the respondent's submission. In the absence of submissions from the applicant addressing the respondent's submission the Tribunal is in a position that it can only determine the application for costs on the respondent's unchallenged submissions.

FINDINGS

1. The general rule expressed in Oshlack v Richmond River Council (1998) CLR 72 is that a successful party has a reasonable expectation of being awarded costs against the unsuccessful party. The usual principles that should apply in the exercise of discretion are that costs should follow the event.
2. The Tribunal has a general discretion under rule 38 to award costs. Where there is a general discretion to award costs the correct principle is that the Tribunal in exercising discretion should have regard to the nature of all relevant factors: Thompson v Chapman [2016] NSWCATAP 6 (7 January 2016) at [72].
3. The purposes of a costs order is to compensate or indemnify a successful party against the expenses to which it has been put (Latoudis v Casey [1990] HCA 59).
4. In Thompson v Chapman at [71] the Appeal Panel said: 71. Where there is a general discretion for costs there is no absolute rule that, absent disentitling conduct, a successful party is to be compensated by the unsuccessful party nor is there any rule that a successful party might not be ordered to bear the costs of an unsuccessful party: Oshlack v Richmond River Council per Gaudron and Gummo JJ at 88 and Kirby J at 121-123.
5. In Gaynor v Burns [2015] NSWCATAP 150 the Appeal Panel considered the decision of Cripps v G & M Dawson [2006] NSWCA 81 where Santow JA considered the words "special circumstances". The meaning attributed is that they circumstance that are special circumstances are circumstances that were clearly out of the ordinary and grossly unreasonable. They do not need to be extraordinary or exceptional. While a finding of "serious unfairness" is not a prerequisite to determining that there are no special circumstances, it is nonetheless a highly relevant consideration.
6. In Cihan v City Tobacconist Pty Ltd & Gebara [2016] NSWCATCD 26 the Tribunal held that "even if Rule 38(3) does not apply given the quantum of the award to the applicant, in that the applicant has been put to the expense of obtaining legal representation to prosecute the claim against the respondents' who put forward defences that lacked factual and legal substance as noted in paragraph 4 of the reasons." The Tribunal went on to follow Cripps.Fairness dictates that the unsuccessful party typically bears the liability for costs unless it is demonstrated that some other order is appropriate: Nguyen v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen [2015] NSWCATAP 264. "While the discretion to award costs under Rule 38 is unfettered, in our view costs should generally "follow the event", recognising however that factors may exist that militate against the successful party recovering all of its costs".
7. In ABB Engineering Construction Pty Ltd v Abigroup Contractors Pty Ltd BC200305610 per Einstein J at 14, His Honour carried out an extensive review of the authorities distilling a number of principles relevant to the determination of costs, in particular: A successful litigant is generally entitled to an award of costs. Costs are not awarded to punish an unsuccessful party. The primary purpose for an award of costs is to indemnify the successful party. If litigation had not been brought…by the unsuccessful party the successful party would not have incurred the expense it did. As between the parties fairness dictates that the unsuccessful party typically bears the cost of the unsuccessful litigation. The traditional exceptions to the usual order as to costs focus on conduct of the successful party that disentitles it to the beneficial exercise of the discretion In Anglo Cyprian Trade Agencies v Paphos Wine Industries, Devlon J referred to "misconduct" by the successful party as the basis for departure from the usual order. In that case, this conduct was construed to be misconduct relating to the litigation in circumstances leading up to it.
8. The Tribunal is satisfied that the provisions of rule 38(2)(b) are enlivened to dispel the exclusionary provision that special circumstances must exist if the general rule that each party should pay their own costs is to be avoided. There is no necessity for special circumstances to be present in order to award costs in this matter. Despite no formal pleadings or evidence to support the claim, all that is required is that the claim exceeds $30,000. It does and therefore Rule 38 applies.
9. Notwithstanding that Rule 38 applies, the Tribunal retains discretion as to whether it will award costs. The respondent has been successful in his contention that the Tribunal did not have jurisdiction and he is entitled to expect that his costs would be ordered to be paid by the applicant in the ordinary course. The Tribunal must consider all the relevant factors, which it has done in consideration of the submissions: Thompson v Chapman. The applicant has not demonstrated why the Tribunal should not exercise discretion to make a costs order other than in the ordinary course in accordance with the authorities: Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin; Citywide Developments Pty Ltd v Dawn Pienga; Dawn Pienga v Citywide Developments Pty Ltd.
10. If the Tribunal is wrong in making the finding that Rule 38 applies. Then is considers if special circumstances exist. The Tribunal is satisfied that if it needs to find special circumstances, then it can do so in these proceedings, for the reasons set out in the respondent's submissions. Those circumstances need not be extraordinary or exceptional. It was necessary for the respondent to defend the claim and was entirely successful in doing so.
11. In the ordinary course, the Tribunal is satisfied that it can exercise its discretion under Rule 38 that the respondent is entitled to an award of costs against the applicant.
12. The applicant contends that he is entitled to indemnity costs where an offer of compromise has been unreasonably rejected.
13. In InterTAN Inc v DSE (Holdings) Pty Ltd [2015] FCAFC 54 at [11], Ryan, Finkelstein and Bennett JJ identified many cases in which indemnity costs will be awarded: A review of the authorities shows that there are various categories of cases in which solicitor and client or indemnity costs can be awarded. They include cases where solicitor client or indemnity costs can be awarded. They include cases where the bringing of an application is 'high handed': Australian Guarantee Corporation Ltd v De Jager [1984]VR 483, 502:where an application has 'no chance of success': Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1998) 81 ALR 397, 401 or is 'hopeless': J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers, Western Australian Branch (No 2) (1993) 46 IR 301,303; where an application is 'unnecessary': Ragata Developments Pty Ltd v Westpac Banking Corporation (unreported, Federal Court, 5 March 1993); where an application is brought and prosecuted 'not for bona fide purposes of protecting and enforcing a legal right, but to achieve an ulterior or extraneous purposes': Ragata Developments Pty Ltd v Westpac Banking Corporation (unreported, Federal Court, 5 March 1993); where an application is commenced in wilful disregard of known facts or contrary to well established law: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1998) 81 ALR 397, 401: where there has been 'some relevant delinquency on the part of the unsuccessful party': Oshlack v Richmond River Council (1998) 193 CLR 72, 89; where the justice of the case warrants such an order: Andrews v Barnes (1887) 39 Ch D 133, 141: and where there are some special or unusual features in a case to justify the court the exercising its discretion in this way: Preston v Preston [1932] Fam 17, 39
14. The principle of when indemnity costs will be applied was explained in Hamod v New South Wales (2002) 188 FCR 659 at [20] per Gray J, with whom Carr J and Goldberg J agreed: Indemnity costs are not designed to punish a party for persisting with a case that turns out to fail. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as normal costs order could not be expected to do, when the court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure costs.
15. The Tribunal is satisfied that respondent has demonstrated that the proceedings against him by the applicant have been brought by the applicant: 1. With no chance of success, the finding being that the respondent was not a contracting party; 2. in wilful disregard of known facts or contrary to well established law; 3. where a reasonable offer of compromise was rejected by the applicant which would have resulted in more favourable outcome for the applicant than was achieved by proceeding with the application

Cost Order

1. The Tribunal is satisfied that the applicant should pay the respondent's costs on an indemnity costs.
2. The Tribunal orders that Aniceta Mondejar Rawlison, pay Tisseer Harmad Ismail Al Masri his costs on an indemnity basis as agreed or assessed

Civil and Administrative Tribunal of New South Wales

28 November 2017 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: 23 January 2018