Roberts v Chan & Naylor Parramatta Pty Ltd aft Chan & Naylor Parramatta Trust

Background

1. The Appellants commenced proceedings in the Consumer and Commercial Division of Tribunal on 24 April 2016 claiming damages against the Respondent arising from advice given on 11 September 2006 as to the structure to be used to purchase a block of land. The Appellant alleged that the advice was negligent and as a consequence of the structure adopted the Appellants subsequently incurred a liability for land tax which would not have applied if a different structure had been used for the purchase.
2. The amount sought in the original application was $40,000. On 15 June 2016, a Member of the Tribunal set the proceedings down for an interlocutory hearing on the issue of jurisdiction, and made directions regarding the filing and serving of submissions on the question of jurisdiction. On 27 July 2016 a Senior Member of the Tribunal ordered that the proceedings be transferred to the District Court. The reasons of the Senior Member state: "The applicant seeks to amend the application to seek orders in the sum of approximately $175,000 which is well in excess of the order making power of the Tribunal".
3. The District Court Statement of Claim sought $200,000. It is unclear what occurred in the District Court in the immediate period after the transfer by way of directions. However, the documents disclose that a Notice of Motion was filed by the Appellant on 1 May 2017 seeking the transfer of the District Court proceedings back to the Tribunal on the basis that the amount of the loss was then said to be only approximately $29,000.
4. On 2 June 2017 orders were made by Levy DCJ in the District Court that proceedings 2016/285476 be transferred back to the Tribunal. Oral reasons were given for the decision, and the documents of the Appellant contain a transcript of reasons.
5. The proceedings in the Tribunal were ultimately heard on 12 October 2017 by Senior Member T Simon. The principal issue addressed in the hearing and the decision was whether the date upon which the cause of action accrued was more than 3 years prior to the commencement of the proceedings and as a result whether the Tribunal had jurisdiction.
6. On 13 October 2017 Orders were made dismissing the claim because the Tribunal did not have jurisdiction. Subsequent to this decision, Senior Member Simon made a lump sum costs order on 22 May 2018 in favour of the respondent. An appeal, AP 17/44924, was lodged in the Tribunal in respect of the order of the Senior Member dismissing the proceedings and was heard by the Appeal Panel in early 2018. The decision on the appeal, Roberts v Chan & Naylor Parramatta Pty Ltd, [2018] NSWCATAP 69, was delivered on 27 March 2018 with orders refusing leave to appeal, and dismissing the appeal.
7. In these proceedings the Tribunal gave directions for the provision of submissions and documents on costs. The parties provided submissions.
8. On 22 May 2018 the Tribunal determined the costs issue and made orders: 1. A hearing on costs is dispensed with pursuant to s 50(1)(c) of the Civil and Administrative Tribunal Act 2013 . 2. The Applicant is to pay the costs of the proceedings $20,987.51.
9. It is these orders which are the subject of this appeal.

Grounds of Appeal

1. The Appellant proceeded on the basis of three grounds of appeal: 1. The Tribunal erred in denying procedural fairness in failing to consider and failing to give adequate reasons that s 60 of the Civil and Administrative Tribunal Act 2013 is applicable and that no special circumstances existed under s 60 of Civil and Administrative Tribunal Act 2013. 2. Tribunal erred in finding that Rule 38 in Civil and Administrative Tribunal Regulations 2014 was applicable and not finding that s 60 of Civil and Administrative Act 2013 is applicable and that no special circumstances existed under s 60 of Civil and Administrative Act 2013. 3. Any other grounds of appeal according to Collins v Urban [2014] NSWCATAP 17the Appeal Panel may notice according to Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP including but not limited the Applicant suffers a substantial miscarriage of justice.
2. In substance the Appellant contends that the finding by the Tribunal at [6] that the Appellant in the application sought an order for an amount of $40,000 ('the finding'), failed to have regard to the fact that at the hearing the Appellant was claiming recovery of a loss of $29,291.55 represented by the amount payable by the Appellant for land tax for the years 2010, 2011, 2012 and 2013.
3. The Appellant contends that the consequence of the finding was that the issue of costs ought to have been subject to section 60 of the Civil and Administrative Tribunal Act 2013 (the Act) and not Rule 38 of the Civil and Administrative Tribunal Rules 2014.
4. The Appellant also contends that the Tribunal ought to have found that there were no special circumstances which warranted a costs order as provided for under subsection 60 (2) of the Act. The Tribunal noted that the parties had provided submissions concerning the existence of special circumstances but did not make a finding as to whether special circumstances existed.
5. The Appeal Panel will address the question of whether there were special circumstances which warranted a costs order.
6. The terms of the finding are not readily identifiable as a question of law for which leave to appeal would not be required under s 80 (2) (b) of the Act. The Appeal panel will proceed on the basis that there are questions of law for which leave is not required.
7. Grounds 1 and 2 involve errors of law for which leave to appeal is not required. Ground 3 involves an error other than an error of law requiring leave to appeal to be granted.

Scope and nature of internal appeals

1. Internal appeals may be made as of right on a question of law, and otherwise with leave of the Appeal Panel: s 80(2) Civil and Administrative Tribunal Act 2013 (NCAT Act). The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Schedule 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on that basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
2. In Collins v Urban [2014] NSWCATAP 17 (Collins v Urban), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: … [T]here was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.
3. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).
4. In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) 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; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.

Time To Appeal

1. The appeal was filed within the relevant limitation period in Reg 25 (4) of the Civil and Administrative Rules 2014.

Reply to Appeal

1. The Respondent submits that the order of the Tribunal should be upheld for the reasons that: 1. Senior Member Simon was correct to conclude that the Tribunal's jurisdiction to award costs in the absence of 'special circumstances' pursuant to r.38(2)(b) of the Civil and Administrative Tribunal Rules 2014 (the Rules) was engaged upon the (First) Appellant commencing a proceeding in which the amount claimed was more than $30,000. 2 On the basis of the unchallenged findings made at paragraph 12 of the Tribunal's reasons, special circumstances exist which warrant the Tribunal ordering that the Applicant's pay the Respondent's costs in relation to the proceedings under s 60 of the Civil and Administrative Tribunal Act 2013. 3. Special circumstances exist which warrant the Tribunal ordering the Applicants pay the Respondent's costs in relation to the proceedings under s 60 of the Act (as set out in the Respondents'' submissions as to costs filed with the Tribunal on 30 October 2017)
2. The Respondent at paragraph 9 of the submissions filed on 30 October 2017: In the present case, the following circumstances exist which bring this case within the scope of s 60(2): a. Ms Roberts pursued a cause of action against the respondents that, properly advised, had no prospects of success given it was time barred under s. 79L; s60(3)(c) Fountain Selected meats (Sales) Pty Ltd v International Merchants Pty Ltd (1988) 81 ALR 397 at 401 per Woodward J. b. Ms Roberts served extensive but largely irrelevant material in support of her claim which respondent's solicitors were put to the cost of reviewing: s60(3)(a). the majority of these costs could have been avoided if the material had been put forward in an ordered and concise manner: Chester v Prestige Promotions Pty Ltd [2014] NSWCAT AP 34 at [36]. In particular; i Ms Roberts evidence, which was comprised of three statutory declarations, was prolix and repetitive; ii Mr Mendonca's evidence (aside from giving evidence of the relevant conversations at paragraph [4] of this statutory declaration dated 21 July 2017 and paragraph [18] of his statutory declaration in reply to Mr Nelson's affidavit dated 6 October 2017) was largely irrelevant; c. Ms Robert's demonstrated a cavalier attitude towards the proceedings before the Tribunal: s 60(3)(b) and (g). For example: i Ms Roberts, by an interlocutory application lodges on 25 September, sought to join other Chan & Naylor entities but at the hearing was unable to justify why they were necessary parties to the proceedings. Ii Ms Roberts appeared to have undertaken little preparation before the hearing and was of very limited assistance to the Tribunal.

Jurisdiction as to Costs

1. Section 60 of the Civil and Administrative Tribunal Act 2013 (the Act) provides: 60 Costs (1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3), (g) any other matter that the Tribunal considers relevant. (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.
2. The public policy evident in section 60(1) of the Act that each party is to pay their own costs of proceedings is subject to a discretion under subsection (2), which permits a costs order if the Tribunal is satisfied that there are "special circumstances" which warrant a costs order. The matters which may be taken into account in determining whether there are special circumstances are listed in section 60(3) (a) to (g).
3. The provisions of section 60 of the Act are also modified if the amount claimed or in dispute in the proceedings was more than $30,000.00. The particular provision as to costs in these circumstances is Rule 38 of the Civil and Administrative Tribunal Rules 2014 (the Rules) which provides: Clause 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: (a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10 (2) of Schedule 4 to the Act in relation to the proceedings, or (b) the amount claimed or in dispute in the proceedings is more than $30,000.
4. The Tribunal may accordingly make a costs order if it is satisfied that 'special circumstances' exist which warrant a costs order. Alternatively the Tribunal may make a costs order if the amount claimed or in dispute exceeds $30,000.

The amount claimed or in dispute

1. The Appellant contends that the amount "in dispute" was only $29,291.55 and accordingly Clause 38 of the Rules does not arise. There are a few aspects to this contention that should be considered. The first is that the actual amount involved was not addressed in the proceedings before the Tribunal, the only issue addressed being the limitation question. The second consideration is that the amount claimed in the initial application was $40,000 and the amount claimed, which required a transfer to the District Court, was increased to $175,000.
2. For reasons discussed below, we are satisfied that "special circumstances" clearly exist under s 60(2) of the Act to justify a costs order being made that the appellant pay the respondent's costs of the proceedings below. We are satisfied that there is no basis to remit the matter back to the Tribunal for further hearing on the issue of costs, as it is inevitable a costs order will be made. In the alternative, exercising our powers under s 81 of the NCAT Act, we are satisfied that a costs order should be made.
3. As the appellant did not raise as a ground of appeal that there was any error by the Senior Member making a lump sum costs order, we are satisfied that the appeal should be dismissed, and the lump sum costs order not disturbed.

Special Circumstances

1. In Gaynor v Burns [2015] NSWCATAP 15 the Appeal Panel give some consideration to special circumstances and stated at [16] - [19] 16 The words "special circumstances" appear in a number of legislative provisions, and have been subject of discussion and comment in respect of the relevant legislation under consideration in each case (see Cabal v United Mexican States [2000] FCA 7) and in this Tribunal (see CPD Holdings Pty Ltd t/a The Bathroom Exchange v Baguley [2015] NSWCATAP 21; Megerditchain v Kurmond Homes Pty Ltd [2014] NSWCATAP 120). 17 The Macquarie Dictionary defines "special" as follows: (1) Of a distinct or particular character. …… (6) Distinguished or different from what is ordinary or usual: special circumstances. 18 The drafting of s 60(1) evinces the intent of the legislature that generally each party to proceedings in the Tribunal shall be responsible for their own costs. Departure from s 60 (1) may occur but only if the Tribunal finds, there are "special circumstances" warranting it to do so. In determining whether there are special circumstances the Tribunal may, in a structured exercise of discretion, have regard to the criteria in s 60 (3) (a) - (g). 19 In Cripps v G & M Dawson [2006] NSWCA 81 Santow JA considered the words "special circumstances" as they appeared in s 88 (1) of the Administrative Decisions Tribunal Act 1997 (NSW) (repealed). That provision enabled the Tribunal to award costs in relating to proceedings before it only if it was satisfied there were "special circumstances warranting an award of costs". Santow JA set out the Tribunal's statement of relevant principle at [18] - [19] of its reasons and concluded that the Tribunal had erred in its application of those principles in failing to find "special circumstances" explaining at [60] 60 It is not necessary to determine whether in the circumstances the appellant committed equitable fraud. In my view it suffices that the conduct of Cripps and Jones, in relying upon their status as the registered proprietors of the freehold and the doctrine of indefeasibility of title to wrongly deny registration and consequently assignment of the lease, so acted as by their conduct to give rise to special circumstances; that is, circumstances that were clearly out of the ordinary and grossly unreasonable so far as the respondent tenant was concerned. On the one hand, the Tribunal correctly concluded that the respondent, through no fault of its own, has been placed in the situation where it has been forced to pursue this litigation. Yet it still failed to find special circumstances. With respect, I consider that the Tribunal was in error in failing to conclude that special circumstances here applied. For this purpose, it suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional. While a finding of "serious unfairness" is not prerequisite to determining that there are special circumstances, it is nonetheless a highly relevant consideration.
2. In these proceedings the Tribunal, although not attributing the following observations to being special circumstances, gave some careful consideration to the Appellant's conduct in the course of the proceedings at [12]: The Tribunal is also satisfied that Ms Roberts conduct has unnecessarily contributed to the costs of the proceedings. Ms Roberts pursued a cause of action against the respondents that was time barred. She provided extensive material in support of her claim which respondent's solicitors were put to the cost of reviewing. That evident became largely irrelevant because of the time issue. Ms Roberts made an application for an adjournment at the hearing so she could obtain legal advice. She was on notice since at least 7 August 2017 that leave had been granted for legal representatives to appear. Ms Roberts conceded during the hearing that she had not even read her own witness, Mr Mendonca's statutory declarations (even though she relied on them in support of her case). Ms Roberts also sought an order that the proceedings be transferred to the District Court on about 27 July 2016, and subsequently agreed that the district Court transfer the proceedings back to the Tribunal on or about 2 June 2017.
3. These considerations appear to involve the factors in subsection 60 (3)(a), (b), (e) and (f) of the Act.
4. Of particular concern to the Appeal Panel is that these proceedings involve a claim for damages based upon alleged negligent advice in September 2006 which, on the basis of the Appeal Panel decision in [2018] NSWCATAP 69, was actionable from the date of occupation of the property by the Appellant in 2009. The proceedings were commenced on 24 April 2016, approximately 7 years after the cause of action on which the proceedings were based arose. This brings into consideration the factors in subsection (60) (3) (c), and (d).
5. The Appeal Panel concludes that all of the circumstances including those identified by the Respondent in the submissions to the Tribunal, see [20] the observations by the Tribunal, see [29] and the matters raised at [25] and [26] by the Appeal Panel involve "special circumstances" which warranted an order by the Tribunal for costs as made. The conduct of the appellant in: (i) commencing proceedings in the Tribunal seeking damages of $40,000; (ii) the matter being transferred to the District Court because the appellant was claiming $175,000; (iii) the appellant being on notice by reason of the directions of the Tribunal on 15 June 2016 that there was a clear issue whether the Tribunal had jurisdiction by reason of the limitation period in the Tribunal for consumer claims (s 79L of the Fair Trading Act 1987 (NSW)); (iv) the appellant increasing her claim in the District Court to $200,000; (v) the appellant reducing her claim to under $30,000 and successfully applying to transfer the matter back to the District Court; and (vi) the appellant's claim being ultimately unsuccessful because it was outside the limitation period in the Tribunal are "special circumstances" under s 60 (2) of the Act.
6. The Tribunal has the power to make a lump sum costs order in appropriate circumstances: Ellis v The Owners Strata Plan 80605 [2018] NSWCATAP 174. As no ground of appeal were identified relating to the decision to award costs on a lump sum basis, rather than as agreed or assessed under the provisions of the Legal Profession Uniform Law Application Act 2014, this aspect of the decision remains unimpeached.
7. The Appeal Panel concludes that the decision by the Tribunal involves an appropriate and principled application of the discretion under section 60 (2). The Appeal Panel concludes that the finding by the Tribunal, see [14] as to the "amount claimed or in dispute" was ultimately irrelevant, because it is inevitable a costs order would have been made on the basis that there were "special circumstances" under s 60 (2) of the Act.

Orders 1. To the extent necessary leave to appeal is refused. 2. Appeal dismissed. 3. If a party to the Appeal wishes to make an application for costs of the Appeal such application and documents in support are to be filed and served by 14 days from the date of this decision. 4. Submissions and documents in opposition to any costs application are to be filed served by 28 days from the date of this decision. 5. The decision on costs will be made on the papers under s 50(2) of the Civil and Administrative Tribunal Act 2013, subject to the submissions of the parties.

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: 10 October 2018