Ross v The Owners - Strata Plan No 61667 - [2023] NSWCATAP 198 - NSWCATAP 2023 case summary

NCAT Appeal Panel|2023-07-20

Summary

On 31 May 2023, I dismissed an application to reinstate appeal proceedings by the applicants, for reasons which are recorded: Ross v The Owners - Strata Plan No 61667 [2023] NSWCATAP 147 (Primary Decision). These reasons assume familiarity with that decision.
The respondent sought its costs of that application. I made directions with a timetable for the filing of evidence and submissions in respect of costs, noting that the Appeal Panel may dispense with a hearing and deal with the issue on the papers. The parties were directed to address that issue in their other submissions, should they wish to.
The respondent lodged evidence and submissions in support of its application in accordance with the timetable. The applicants did not. Nor did they apply for an extension of time. However, they did file material in response to the application late. I have had regard to it notwithstanding its lateness but, other than opposing the application, the applicants largely addressed their disagreement with the decision at first instance and, to a lesser extent, my decision.
Neither party opposed my dispensing with a hearing and determining the application on the papers. As I am satisfied that the issues for determination can be adequately determined in the absence of the parties by considering the written submissions and other material lodged with the Tribunal, I will make an order dispensing with a hearing: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 50(2) .
For the reasons that follow, I will order that the applicants pay the respondent's costs in the fixed sum of $6,245.

Costs in a fixed sum

The respondent goes on to make submissions as to why the costs awarded should be in a fixed sum. It relies on an assertion that although any cost order made in favour of the respondent is not part of the applicants' bankrupt estates, it is unlikely the applicants will pay the cost order. It also submits the costs sought are modest and the cost of a formal assessment would be disproportionate in the circumstances.
Notwithstanding the evidence of Ms Parker, the respondent suggests an order of a discounted fixed sum in the amount of $6,245, after applying a discount of 20% to the costs incurred by the respondent in respect of its solicitors fees.

Principles relating to costs of the applications

The primary provision governing costs in relation to proceedings in the Tribunal is s 60 of the NCAT Act. Pursuant to that section, each party to proceedings is generally to pay their own costs in applications of this nature. However, pursuant to s 60(2) of the NCAT Act, the Tribunal may award costs if it is satisfied that there are special circumstances warranting it doing so. Section 60(3) provides a non-exhaustive list of relevant factors which might constitute special circumstances.
Each application for costs must be determined on its own merits and the central and overriding principle in any order 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].
"Special circumstances" are circumstances that are out of the ordinary but need not be those which are 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, I 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 in a fixed sum?

In STAR Training Academy Pty Ltd v Commissioner of Police (No 2) [2022] NSWCATAP 98 (Star), a differently constituted Appeal Panel synthesised the considerations in respect of awarding costs in a fixed sum, as follows: 50. Deriving the relevant principles applicable to ordering costs in a lump sum from those deemed appropriate by the courts, we note that: (1) The discretion is not confined and may be exercised whenever the circumstances warrant its exercise: Harrison & Anor v Schipp [2002] NSWCA 213; 54 NSWLR 738 per Giles JA at [21]-[22]; (2) "The power should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available.": ibid, at [22]; (3) The power must be exercised judicially and only after giving the parties an adequate opportunity to make submissions. The Tribunal should be confident that the approach taken to estimate costs is fair, logical and reasonable: Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; 135 ALR 160, von Doussa J; (4) The use of the power may be appropriate where the formal assessment would disadvantage the successful party because of the likely inability of the unsuccessful party to discharge the costs liability in any event: Harrison v Schipp; Sony Entertainment (Aust) Ltd v Smith (2005) 215 ALR 788 at [90], [194]-[195]; Hadid v Lenfest Communications Inc [2000] FCA 628; (5) The power may also be exercised where a party's conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings: Leary v Leary [1987] 1 WLR 72; [1987] 1 All ER 261; Sony Entertainment (Aust) Ltd v Smith; Microsoft v Jiang (2003) 58 IPR 445; [2003] FCA 101; (6) The assessment of any lump sum to be awarded must consider the complexity of the issues raised on the pleadings; the interlocutory processes; the preparation for final hearing and the final hearing: Smoothpool v Pickering [2001] SASC 131; (7) In the exercise of its discretion the Tribunal is not required to undertake a detailed examination of the kind that would be appropriate to taxation or formal costs assessment: Harrison v Schipp at 743; Hadid v Lenfest Communications Inc at [35]; Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1 at 5; [1999] FCA 673; (8) A discount of the costs actually incurred or estimated may be applied, in order to take into account the contingencies that would be relevant in any formal costs assessment: Leary v Leary at [76] per Purchas LJ; Beach Petroleum NL v Johnson (No 2) at 123; Auspine Ltd v Australian Newsprint Mills Ltd at 164-165. A discount in the range of 10-30% is typically appropriate: Ross v Padget [2016] NSWSC 1851 at [16] and [21]; Fisher-Pollard by her tutor Fisher-Pollard v Fisher-Pollard [2018] NSWSC 807 at [38]). However, the appropriate order in each case will turn upon the evidence: Hamod v State of New South Wales [2011] NSWCA 375 at [813] per Beazley JA (Giles and Whealy JJA agreeing); (9) On the one hand the Tribunal must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary "fail safe" discount on the cost estimates submitted to the Court: Leary v Leary at 265; (10) Finality to litigation is in everyone's interest. In many cases that factor alone will weigh heavily on whether a lump sum costs order should be made: Edward Ted Lakis and Anor v Michael Victor Lardis and Anor (No 3) [2018] NSWSC 1296 at [57]; Lawcover Insurance Pty Ltd v Muriniti and Newell [2018] NSWSC 558 at [10]; (11) Where a lump sum costs order is appropriate, the Tribunal should take a "broad brush" approach to determining the lump sum: Harrison v Schipp; (12) Requiring the same or similar level of detail as in a formal costs assessment would defeat the purpose of the lump sum order." Bechara (T/as Bechara and Co) v Bates [2016] NSWCA 294 at [14].
As submitted by the respondent, commonly, no discount ought to be applied in respect of disbursements. Counsel's fees are also often allowed in full in a fixed sum costs order, unless there is any reason to think those fees are not within an appropriate range: Re Ji Woo International Education Centre Pty Ltd [2019] NSWSC 338 at [29]; In the matter of Beverage Freight Services Pty Ltd [2020] NSWSC 797 at [36].

Determination

Here, in respect of the respondent's costs for representation in respect of the application, I am satisfied that: 1. The applicants' lodgement of the application out of time and prosecution of it without probative evidence or complying with directions for the lodgment of written submissions, taken with its clear lack of merit, are special circumstances warranting an order for costs in respect of the application; 2. Application of the considerations set out in Star makes it appropriate that a fixed sum order be made, if I can be satisfied that I can appropriately calculate such a fixed sum; 3. The hourly rates claimed by the respondent's solicitors fall within a reasonable range; 4. In respect of the time claimed, it is sufficiently set out in invoices attached to Ms Parker's affidavit and apparently reflects necessary work undertaken by the respondent's solicitors; 5. An appropriate discount of 20% should be applied, notwithstanding, to allow for the vicissitudes of the assessment process; and 6. Counsel's fees appear reasonable and ought not be discounted. The discount to the solicitor's fees appropriately encompasses any limited discount that might be warranted in this regard.
Overall, the respondent's estimate of costs as sought in the proposed order is fair, logical and reasonable.

Orders

I will order: 1. A hearing of the Respondent's application for costs is dispensed with; and 2. The Applicants are to pay the Respondent's costs in the fixed sum of $6,245.

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 July 2023

Ross v The Owners - Strata Plan No 61667

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Judgment (8 paragraphs)

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Cases Cited (23)