S&J Harris Building Services Pty Ltd v Jacques

The Builder's documents on appeal

1. The Builder was legally represented before the Tribunal, but on appeal was represented by its director Mrs J Harris.
2. The Builder relied on two volumes of material which included the Notice of Appeal, a typed transcript of the proceedings before the Tribunal, some of the evidence before the Tribunal and other documents including extracts of relevant legislation.

Notice of Appeal

1. The Notice of Appeal states that the Builder is seeking leave to appeal, and that the Costs Decision was not fair and equitable, against the weight of the evidence, and that there was significant new evidence now available that was not reasonably available at the time of the Tribunal hearing.

Grounds of Appeal

1. The Builder's grounds of appeal are set out in Attachment 1 to the Notice of Appeal. The attachment is 21 pages in length and we summarise the Builder's grounds of appeal as follows: 1. as to errors claimed by the Builder to be errors of law: 1. the Tribunal failed to consider s 60 of the Civil and Administrative Tribunal 2013 Act (NSW) (NCAT Act). We will call this Ground One; 2. the Tribunal failed to consider r 38(2) of the Civil and Administrative Rules 2014 (NSW) (NCAT Rules). We will call this Ground Two; 3. the Tribunal failed to consider s 55 of the NCAT Act. We will call this Ground Three; 1. as to errors claimed by the Builder to be errors of fact: 1. the Tribunal failed to give proper weight to the two offers made by the Builder to settle the matter. We will call this Ground Four; 2. the Tribunal Member failed to take into account all the times he mentioned costs to the Builder over the two day hearing. We will call this Ground Five; 3. the Tribunal failed to consider the "Applicable Law Section" of the Builder's Costs submissions. We will call this Ground Six; 4. the Tribunal gave the Homeowner "a massive and unfair advantage by allowing the matter to proceed", based on there being no evidence to support the Homeowner's case. We will call this Ground Seven; 5. the Tribunal failed to read the Builder's evidence. We will call this Ground Eight; 6. the Tribunal "seems to give advantage" to the Homeowner by "allowing the use of photos …, proceeding without a Scot Schedule, ignoring the fact that [the Homeowner] hadn't complied with any Orders. We will call this Ground Nine.
2. After setting out a commentary over almost four pages on various paragraphs of the Costs Decision, the Builder then submits that there was an error of law in relation to ss 55 and 60 of the NCAT Act and r 38(2) of the NCAT Rules, namely: 1. We believe Section 36, 55 and 60 and Rule 38(2) apply to both matters and support the Builder's claim for costs, as both matters are intertwined as confirmed by [the Tribunal] (Annexure H, Page 540, Point 2810-2812). Special circumstances overwhelmingly applies, as per evidence below, with regard to the Builder's costs, but Rule 38(2) can be applied to the Homeowner's costs to the Builder. With the fact that the Homeowner did not have ANY EVIDENCE. Even with this clear decision [the Tribunal] did not award costs to the Builder, who has spent a small fortune defending the Homeowner's baseless claim. Which then shows overwhelmingly that costs should and must be granted to the Builder. 2. The entire transcript … is compelling reading to award costs to the Builder due to the above laws/rules. This is the adjourned hearing due to the Homeowner and Beazley not showing up for the hearing. 3. The Builder had to pay a significant cost for his Lawyer to attend that day and he lost a day's unpaid work but still no costs were awarded. This is clearly another unfair advantage paid to the Homeowner. Surely the matter should have been thrown out and costs awarded due to the continual patterns of non compliance, which is a huge disadvantage to the Builder… . 4. Again [the Tribunal] choses to ignore all of the Acts and Laws at his disposal, the matter continues at significant cost to the Builder. The Builder overwhelmingly wins his case and Goldstein still can not find a point of law to award the Builder costs. (capitalisation as in original)
3. Some eight pages of submissions then develop an argument that the Tribunal should have found that special circumstances were established as warranting an award of costs. We will call this Ground Ten.
4. In conclusion the Builder submits: C. ORDERS THE NCAT APPEAL PANEL SHOULD MAKE To the best of our ability we have compiled clear violations supported by evidence outlined in this document with regard to costs: 1. All of the Builder's legal fees be paid by the Homeowner due to Goldstein's failure not to find a special circumstance with regard to the Civil and Administration Tribunal Act 2013 Section 60(a)(b)(c)(e)(f) 36(1)(2)(3)(4) and Rule 38(2) of the Civil and Administrative Tribunal Rules 2013 (NSW) within this document. Due to the fact that the Homeowner did not comply with any of NCAT's orders. Due to the fact that Homeowner did not comply with the legal binding contract - Clause 22(b) reporting of defects. Due to all of the overwhelming evidence in this document with regard to the Civil & Administrative Tribunal Commercial Guidelines when awarding costs. OR 2. All of the Builder's legal fees to be paid by the Homeowner as the Homeowner did not have any evidence to support her unsubstantiated claim to sue the Builder for $120,000 (See Annexure D, Page 45, Point 133). Due to this amount the Builder was advised by CAT to get legal representation due to the huge amount of money in question (Annexure F, P461, Point 15). The implications for this baseless claim is all outlined within this document and supports awarding the Builder costs for this. OR 3. All of the Builder's legal fees paid since their offer of settlement on 15/.7/2021, which is clearly substantially better than that of the decision on 1 June 2022. OR 4. Costs as applied for in the Submission by Kevin Keane … .

Internal appeals

1. Section 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) sets out the basis upon which internal appeals from decisions of the Tribunal may be brought.
2. Internal appeals may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel: NCAT Act, s 80(2).
3. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. whether there has been a failure to provide proper reasons; 2. whether the Tribunal identified the wrong issue or asked the wrong question; 3. whether a wrong principle of law had been applied; 4. whether there was a failure to afford procedural fairness; 5. whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. whether the Tribunal took into account an irrelevant consideration; 7. whether there was no evidence to support a finding of fact; 8. whether the decision is so unreasonable that no reasonable decision-maker would make it.
4. In Prendergast the Appeal Panel also stated at [12] that, in circumstances where an appellant is not legally represented, it is appropriate for the Tribunal to approach the issue by looking at the grounds of appeal generally, and to determine whether a question of law has in fact been raised (subject to any considerations of procedural fairness to the respondent that might arise).
5. We have undertaken that exercise. We consider that the Builder has identified a question of law, namely that a wrong principle of law was applied, namely the Tribunal finding that costs in respect of the Builder's application was governed by s 60 of the NCAT Act, and not by r 38 of the NCAT Rules.

Leave to appeal

1. Clause 12 of Sch 4 of the NCAT Act provides that, in an appeal from a decision of the Consumer and Commercial Division of the Tribunal, an Appeal Panel may grant leave to appeal only if satisfied that the appellant may have suffered a substantial miscarriage of justice because: 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. The principles to be applied by an Appeal Panel in determining whether or not leave to appeal should be granted are well settled. In Collins v Urban [2014] NSWCATAP 17 the Appeal Panel conducted a review of the relevant cases at [65]-[79] and concluded 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.
3. Even if an appellant establishes that they may have suffered a substantial miscarriage of justice in the sense explained above, the Appeal Panel retains a discretion whether to grant leave under s 80(2) of the NCAT Act. An appellant must demonstrate something more than that the Tribunal was arguably wrong: Pholi v Wearne [2014] NSWCATAP 78 at [32].

The Costs Decision

1. It is appropriate to summarise the structure and substance of the Costs Decision.
2. The Costs Decision was 10 pages in length.
3. Paragraphs [1] to [6] set out relevant background. At [4] the Tribunal notes that the Builder had filed a costs application and submissions in support on 15 June 2021, and that the Builder sought an order for indemnity costs from two possible dates, alternately an order that the Homeowner pay its costs on the party/party basis.
4. This appears to relate to the costs of the Builder's application, as at [35] the reasons state, "I dismiss the [B]uilder's application pay its costs in [the Homeowner's application].
5. In paragraphs [7] to [14], headed "Costs jurisdiction", the Tribunal then considers which is the relevant costs rule in each of the two applications. He concluded at [11] that r 38 applied in respect of the Homeowner's application. He concluded at [12] and repeated at [16] that s 60 of the NCAT Act applied in respect of the Builder's application.
6. We pause to note that we consider that the Tribunal was correct in reaching those conclusions.
7. Paragraphs [15] to [19] are headed "Costs in the [B]uilder's application". At [16] the Tribunal reiterates that s 60 is the relevant costs rule and that: In the absence of a finding of special circumstances, I find that s60(1) of the [N]CAT applies and that each party to the proceedings must pay their own costs.
8. At [18] the Tribunal then notes the two offers of compromises made by the Builder. At [19] it states that in order to give proper consideration to these offers, he would have regard to them in the context of the Builder's claim for costs of the Homeowner's application.
9. Paragraphs [20] and [21] are headed "Costs on the [Home]owner's application". At [20] the Tribunal states that the Homeowner's application was for $120,000 for defective work, her points of claim seeking work orders for defective work and consequential damage.
10. Paragraph [21] lists the work orders the Homeowner was successful in obtaining.
11. The balance of the reasons consider the two offers of compromise. In [22] to [25] the Tribunal clearly sets out the content of the two separate offers. At [26] the Tribunal states: The issue is whether I should take the [B]uilders offers into account in connection with the costs of the [Home]owner's proceedings. The answer to that question will determine the extent to which I may take the offer's [sic] - offers] into account in the [B]uilder's costs application, because I find that the offers relate to both sets of proceedings and were not separable.
12. At [27] the Tribunal sets out relevant caselaw in SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 which was approved in Jones v Bradley (No 2) [2003] NSWCA 258: The making of an offer of compromise in the form of a Calderbank Letter … where the offeree does not accept the offer but ends up worse off than if the offer had been accepted, is a matter to which the court may have regard when deciding whether to otherwise order, but it does not automatically bring a different order as to costs. All the circumstances must be considered, and while the policy informing the regard had to a Calderbank letter is promotion of settlement of disputes an offeree can reasonably fail to accept an offer without suffering in costs. In the end the question is whether the offeree's failure to accept the offer, in all the circumstances, warrants departure from the ordinary rule as to costs, and that the offeree ends up worse off than if the offer had been accepted does not of itself warrant departure.
13. Thus at [28], the Tribunal stated that the first issue he should consider was whether the Homeowner ended up worse off than she would have been if one or other of the offers had been accepted. The Tribunal stated that if the answer to that question was, yes, then it must then determine whether the Homeowner's failure to accept either one of the offers warranted a departure from the ordinary rule as to costs given that she was the successful party in her application.
14. The Tribunal's conclusions are then set out as follows: 29. I find that on the face of the [B]uilder's offers and the evidence that I have had regard to on the question of costs, it is not possible for me to make a finding about whether the [Home]owner ended up worse off that she would have if one or other of the [B]uilder's offers had not been accepted. The reasons for this are first, in the [B]uilder's 28 May 2021 Without prejudice save as to costs offer, it identified the defects which it was prepared to rectify in a list which was enclosed. A comparison of that list to the defects that the [B]uilder was ultimately ordered to rectify would lead to a determination of whether the owner ended up worse off by not accepting the [B]uilder's 28 May 2021 offer. I have not been provided with a copy of the list that was attached to the [B]uilder's 28 May 2021 offer and therefore I am unable to carry out that determination. 30. I therefore find that I am unable to determine whether the [B]uilder's 28 May 2021 Without prejudice save as to costs offer is capable of justifying a finding that the [Home]owner should pay the [B]uilder's costs in the owner's application. In addition because the [B]uilder's offer to rectify defects was subject the owner paying the compromised or discounted sum of $20,170.67 in the [B]uilder's application, find that the offer should not be taken into account in the [B]uilder's case. The offer to accept $20,170.67 was not capable of acceptance in its own right and therefore not capable of being a special circumstance in the [B]uilder's costs application. 31. Secondly, the [B]uilder's 15 July 2021 Without prejudice save as to costs offer relied upon its response to the [Home]owner's defect schedule. The [B]uilder's document responds to photographs taken by the [Home]owner which were annexed to her statement dated 17 May 2021. Unfortunately, the [Home]owner's defect schedule was not in the form of a scott schedule. The [Home]owner's defective work schedule which was at attachment G to her statement, was a series of photographs described in a number of different ways. The [B]uilder's response to this attachment did not use the same means of identifying a photograph as the owner had used, so that I am unable to identify which of the owner's defects the [B]uilder offered to rectify. 32. As a result if I have regard to attachment G of the [Home]owner's statement and the [B]uilder's Response to Defect Schedule which is at tab 10 of exhibit A, I find it is not possible for me to determine whether the owner ended up worse off by not accepting the builder's 21 July 2021 offer. 33. I also find that the [B]uilder's 21 July 2021 offer cannot be taken into account in its application because its offer to rectify defects was subject the [Home]owner paying the total compromised or discounted sum of $19,557.66. The offer to accept $19,557.66 was not capable of acceptance in its own right and therefore was not capable of being a special circumstance.
15. In conclusion, in the Builder's application the Tribunal ordered each party to pay their own costs (at [34]). In the Homeowner's application the Tribunal dismissed the Builder's application for costs (at [35]).
16. We note that the Homeowner made no submissions as to her own costs: see [5]. This was confirmed by Mr Beazley at the appeal hearing.

Separate costs decisions

1. It is necessary to note that the Builder's application and the Homeowner's application were two separate applications before the Tribunal and separate costs decisions were made in respect of each. While we accept that, as submitted by the Builder, the two applications were "intertwined", it was appropriate (and legally correct) for the Tribunal to deal with the costs of each application separately. To cite but one example of where the Tribunal has done so, see CPD Holdings Pty Limited v Baguley [2016] NSWCATAP 103.
2. Furthermore, in Hanave the Appeal Panel considered the position when there were two applications stating: 42. The questions to be determined are what is the amount "claimed", what is the amount "in dispute" and what are "the proceedings" in circumstances where there are two applications, the second in the nature of a cross-application ("cross application"). … 45. … for the purpose of r 38 the application and cross application are "different sets of proceedings" unless the two applications are consolidated. Therefore, r 38 must be considered in respect of each separate proceedings. 46. The next question is, what is the amount claimed or in dispute in each proceeding and is any cross application relevant to determining the amount in dispute in each proceeding.

Builder's costs submissions to the Tribunal

1. At this point it is appropriate to summarise the content of the Builder's costs submissions to the Tribunal.
2. Paragraphs [1] to [8] set out background matters.
3. Paragraph [9] sets out the orders sought.
4. At [11] the Builder states: Whilst the starting point for the Tribunal's considerations on costs is [s 60] …. Because the amount in dispute in the Homeowner's claim exceeded $30,000 [r] 38(2) … applies and the Tribunal does not need to find special circumstances in order to award the Builder's costs.
5. In [13] the Builder sets out over three pages statements of principle articulated by the Tribunal in Tom v Jenkins (No 2) [2018] NSWCATCD 24. At [14] the Builder then sets out statements of principle found in McPherson v Mace [2017 NSWCATAP 227 at [46] being: We refer to the recent Court of Appeal decision in Miwa Pty Ltd v Siantan Properties Pty Ltd (No. 2) [2011] NSWCA 344. In that case Basten JA identified two questions which are relevant to a 'Calderbank' offer and a claim for indemnity costs. They are whether: (a) there was a genuine offer of compromise, and (b) it was unreasonable for the offeree not to accept it.
6. At [15] to [24] the Builder then sets out its submissions for making an application for indemnity costs based on an offer of compromise dated 28 May 2021. The Builder submitted: 15. The Builder offered to resolve any dispute between them and the Homeowner in relation to both the Builders and Homeowners claim in their letter 28 May 2021 on the following basis: 1. Our client [the Builder] will attend promptly to rectify the defects identified as being their responsibility in the enclosed defect list, subject to; 2. Payment by your client [the Homeowner) to our client [the Builder] of $20,170.67. 16. The Builder's offer forms a proper basis for the Tribunal to award them indemnity costs of both Proceedings as: a. It was a substantial discount against the ultimate award made by the Tribunal. b. It was a substantial discount against the amounts owing to the Builders by the Owners; and c. It made no claims for the Builders then legal costs to date. 17. The other key features of the offer that are relevant to the Builders' application for indemnity costs are as follows: а. In the offer 28 May 2021, the Builders identified the outstanding invoices owed by the Homeowner; b. The Builder identified the details of the Homeowners defect claim; c. The Builder had attended with the Homeowners representative at the Homeowners property to inspect the defects; d. The Builder provided its assessment of the defect repair and offered to undertake rectification of the items accepted as defective; e. The Builder offered to attend for further investigations of other items; and f. The Builder responded and addressed other items identified in the Homeowners statement filed in the proceedings. 18. At this stage the Homeowner had filed all its evidence and did not alter or improve on that evidence further in the proceedings. 19. In addition, the Homeowner was fully aware of the Builders claim as it had been subject of considerable correspondence prior to commencement of the proceedings (folder 1, pages 17 to 41). 20. The Homeowner failed to provide documents identifying the cost of the work omitted from the scope of work despite requests (see letter dated 26/1/20 as referred to in invoice Folder 1, page 29) until a subpoena was issued for their production (see attachment 'B' 3rd paragraph. Even then the Homeowner failed to provide all the documents as a number of items had to be estimated. 21. In light of the above, it was unreasonable for the Owners not to have accepted the Builders' offer. 22. The offer was made at a very early stage in the dispute between the parties.
7. Finally, the Builder then states that it relied on the matters set out in [18] to [22] of its submission "in relation to the offer in their email [of] 15 June 2021". Presumably this was an error and the email referenced was dated 15 July 2022, being the email of that date.
8. Relevantly, the email, as we understand matters, offers to settle invoice 661 for $17,000.
9. At [25] to [28] the Builder alternatively seeks its costs on the party/party basis, consistent with r 38.
10. Finally, the Builder then sets out submissions relating to "Additional support for costs" stating: 29. The Builder says that the Homeowner should be liable for costs on the basis that the Homeowner unnecessarily increased the cost of the proceedings and/or caused the Builder additional costs for failing to progress the proceedings in a timely and considerate manner. 30. The Homeowner: a. did not contact the Builder to make any offers in relation to settlement; b. did not respond to the Builders offers in attachment 'A' and 'B'; c. failed to respond to the Builders lawyers request to agree on a joint bundle (see letter at Folder 1 page 322) pursuant to orders 15 made on 13 July 2021 and the Builder prepared the hearing bundle; d. failed to respond to the Builders lawyer's request to agree on a statement of issues, statement of facts and chronology, pursuant to order 15 of orders 13 July 2021 (see letter at Folder 1 page 326); e. failed to provide the Builder with a copy of their filed defence and instead sent the Builder an incorrect defence (see Transcript 2965), this was not identified until during the hearing; f. acknowledged its tardiness in relation to filing evidence (Transcript 3081); g. failed to provide expert evidence or a scott schedule despite having a substantial $120.000 claim for alleged defects. This made it very difficult for the Builder to respond to the allegations as they were unclear; h. imposed the cost of legal representation for a claim they did not support with evidence as the Builder was advised by the Tribunal to get a lawyer at the directions hearing on 20 May 2021 due to the amount of the Homeowners claim and the Homeowner was represented by a lawyer. i. failed to attend the first day of the hearing on 13 December 2021 until contacted by the Tribunal. This resulted in the Builder incurring unnecessary costs in attendance. 31. The Builder was always willing and able to attend to rectification of defects they were liable to rectify however the Homeowner did not respond to any reasonable request to make further investigations or to attend.
11. The submissions concluded: 32. For the reasons outlined above, the Tribunal should make an order that the Owners pay the Builders' costs of the Builders' and Homeowners Proceedings on the indemnity basis from 28 May 2021. 33. In the alternative, the Tribunal should make an order that the Owners pay the Builders' costs of the Builders' and Homeowners Proceedings on the indemnity basis from 15 June 2021; or 34. In the alternative, the Tribunal should order that the [Home]owners pay the Builders' costs of both the Builders' Proceedings and the [Home]owners Proceedings on a party/party basis.
12. We note three particular matters arising from the Builder's submissions: 1. the Builder never made separate submissions in relation to the Builder's application on the one hand the Homeowner's application on the other; 2. the Builder never referred to s 60 of the NCAT Act, and never made an application that the Tribunal find that there were special circumstances warranting an award of costs pursuant to s 60(3) in either application; 3. the Builder never made any separate application in relation to the costs of the first day of hearing "thrown away".
13. We note those matters as an appeal to the Appeal Panel does not provide a losing party in the Tribunal below with the opportunity to run their case again: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10].

Transcript

1. We interpolate at this point that the Builder's submissions refer to the transcript of proceedings and give transcript references. We assume therefore that the Builder provided the Tribunal with the relevant transcript. Mrs Harris told us during the hearing that she did not know whether the Tribunal did or did not have the transcript, but Mr Beazley indicated that the Tribunal had been provided with the transcript.
2. After the appeal hearing, Mrs Harris sent an email to the Registry attaching a document which Mrs Harris claimed contained "some extremely important information", which will "have a bearing on the decision process, around the transcripts that were available to Senior Member Goldstein when he made his decision".
3. The usual rule is that parties are not entitled to send further submissions to the Tribunal after a hearing has finished, at least not without the leave of the Tribunal: see the discussion of this issue by the Appeal Panel in Murphy v Trustees of Catholic Aged Care Sydney [2019] NSWCATAP 37 and the authorities referred to at [106] to [110].
4. We understand that a copy of the email was provided to the Homeowner. As no objection has been made by the Homeowner to us reading the email and the note, given the sensitivity of the transcript issue to the Builder we have read the note attached to the email.
5. Relevantly, Mrs Harris states, in summary that: 1. the transcript of the hearing on 20 May 2022, which the Builder paid at its own expense, was not seen by the Tribunal; [1] 2. the transcript of the adjourned hearing of 13 December 2021, again paid for by the Builder, was not seen by the Tribunal; [2] 3. the only transcript seen when the Tribunal made the Costs Decision was the transcript of 14 December 2021.
6. We see no need to decide whether or not the Tribunal was provided with a transcript of any of the hearings, as determination of the appeal does not turn on this issue.

The appeal in relation to the Builder's application

1. It is not necessary to discuss the myriad of matters raised by the Builder. That is because we consider that the Builder has identified a fundamental issue in relation to the costs decision in respect of the Builder's application.
2. The Tribunal found that r 38 of the Rules was not the relevant costs rule, but that s 60 of the NCAT Act was. The Builder submits that the Tribunal failed to consider r 38. That is not correct, plainly it did. The Builder's substantive point is that the Tribunal erred when it failed to apply r 38 as the applicable costs rule.
3. We agree.
4. Section 60 of the NCAT Act relevantly 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. …
5. However, r 38 of the Rules relevantly provides that: 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.
6. In the written submissions before the Tribunal, the Builder had submitted that r 38 was the relevant costs rule. However, this submission was rejected by the Tribunal for the following reasons: In its Points of Claim the builder claimed to be paid the amount stated in 2 invoices plus interest. In its submissions dated 12 October 2021, it claimed $27,573.35 plus interest at $10.38 per day. The case was heard on 13 December 2021. I find that the Rules do not apply to the builder's case because the amount claimed or in dispute was not more than $30,000. As a result, s60 of the CAT applies to its costs application.
7. As noted, ultimately the Tribunal ordered the Homeowner to pay the Builder $30,759.81. In those circumstances, in our view it must be the case that the amount "in dispute" was more than $30,000, and therefore r 38 applies.
8. In its application the Builder claimed to be paid for two invoices plus interest. The first as invoice 657 dated 29 December 2020 which totalled $2,325.15 excluding GST. The invoice also claimed "Interest - as per signed contract - 15%p/a - x3 months $87.20": Costs Decision at [12]. The Homeowner conceded the $2,557.67 claimed in invoice 657. The Tribunal awarded this amount but calculated the interest as $517.65, thus allowing a total of $3,075.32.
9. The second invoice was invoice number 661 dated 18 February 2021 which claimed $17,177.27 excluding GST and interest of $214.71: Costs Decision at [12]. At the hearing the Builder applied to amend its Points of Claim so as to amend this claim to $22,713.75 (Costs Decision at [18]). The Tribunal awarded a total of $22,042,56 plus GST being $24,246.81. Interest was calculated at $3,437.68.
10. The total awarded was $30,759.81. Accordingly, we consider that the amount claimed by the Builder was more than $30,000 and thus r 38 applies.
11. At the appeal hearing the Homeowner claimed that the Tribunal correctly found that s 60 applied, as the "amount in dispute" was less than $30,000 (as the Homeowner had conceded the first invoice). We disagree, and consider that the expressions in r 38, "the amount claimed", "or in dispute" are disjunctive.
12. The meaning of r 38 has been considered in many decisions including The Owners Corporation Strata Plan No. 63341 v Malachite Holdings Pty Ltd [2018] NSWCATAP 256, and more recently in Hanave.
13. In Malachite, the Tribunal stated at [3]: Rule 38(2)(b) applies to the following proceedings: (1) Where the relief claimed in the proceedings is for an order to pay a specific amount of money, or an order to be relieved from an obligation to pay a specific amount of money, and that amount is more than $30,000; (2) Where an order is sought in the proceedings for the performance of an obligation (such as to do work), and the Tribunal has power make an order to pay a specific amount of money, even if not asked for by the claimant, provided that (a) there is credible evidence relating to the amount the Tribunal could award; and (b) that evidence, if accepted, would establish an entitlement to an order for an amount more than $30,000. (emphasis added)
14. In the Builder's application, the evidence did establish an entitlement to an order for an amount of more than $30,000.
15. We conclude in relation to the costs decision in the Builder's application that the appeal should be allowed, and order (2) of the Costs Decision set aside.
16. When confirming, affirming or varying, or making a decision in substitution for the decision under appeal, the Appeal Panel may exercise all the functions that are conferred or imposed by the NCAT Act or other legislation on the Tribunal: NCAT Act, s 80(2).
17. We consider it consistent with the guiding principle (NCAT Act, s 36) that we re-exercise the Tribunal's discretion as to costs rather than return the matter to the Tribunal for reconsideration.
18. As the correct costs rule in the Builder's application is r 38 of the NCAT Rules, ordinarily costs follow the event and, the Builder being successful in its claim, it is entitled to its costs.
19. Therefore, in lieu of order (2) of the Costs Decision we order the Homeowner to pay the Builder's costs of the Builder's application as agreed or as assessed.

The appeal in relation to the costs of the Homeowner's application

1. As already noted, the Tribunal dismissed the Builder's application for costs. The Tribunal correctly found that r 38 applied to that application. Ordinarily that would mean that mean that the Homeowner would be entitled to her costs of her application.
2. We were told at the appeal hearing that the Homeowner made no application for costs.
3. However, the Builder sought its costs. For the reasons discussed above, the Tribunal declined to make a special costs order on the basis of the two offers of compromise.
4. We agree with the Tribunal's consideration of that issue.
5. In its written submissions to the Tribunal the Builder identified other issues which it submitted were relevant to its application for costs in the Homeowner's application. These matters were that the Homeowner: а. did not contact the Builder to make any offers in relation to settlement; b. did not respond to the Builders offers in attachment 'A' and 'B'; c. failed to respond to the Builders lawyers request to agree on a joint bundle (see letter at Folder 1 page 322) pursuant to orders 15 made on 13 July 2021 and the Builder prepared the hearing bundle; d. failed to respond to the Builders lawyer's request to agree on a statement of issues, statement of facts and chronology, pursuant to order 15 of orders 13 July 2021 (see letter at Folder 1 page 326); e. failed to provide the Builder with a copy of their filed defence and instead sent the Builder an incorrect defence (see Transcript 2965), this was not identified until during the hearing; f. acknowledged its tardiness in relation to filing evidence (Transcript 3081); g. failed to provide expert evidence or a scott schedule despite having a substantial $120,000 claim for alleged defects. This made it very difficult for the Builder to respond to the allegations as they were unclear; h. imposed the cost of legal representation for a claim they did not support with evidence as the Builder was advised by the Tribunal to get a lawyer at the directions hearing on 20 May 2021 due to the amount of the Homeowners claim and the Homeowner was represented by a lawyer. i. failed to attend the first day of the hearing on 13 December 2021 until contacted by the Tribunal. This resulted in the Builder incurring unnecessary costs in attendance.
6. These matters were not explicitly dealt with by the Tribunal.
7. In our view, matters (a) and (b) were implicitly dealt with by the Tribunal's consideration of the offers of compromise, and we see no error by the Tribunal.
8. Matters (c) to (h) were not referred to by the Tribunal and thus not considered in the Costs Decision in relation to the Homeowner's application. However, they could only have been considered to support an argument by the Builder that it was entitled to its costs in the Homeowner's successful application against it. The difficulty with that argument is that this is not the way the matter was put to the Tribunal, and we do not think it appropriate to allow the Builder to reframe its arguments on costs to the Tribunal on appeal. The simple fact is that the Homeowner was successful in seeking a work order.
9. As to matter (i), the Builder made no submission about the first day of the hearing. The background was that the matter had been listed for hearing on 13 December 2021 commencing at 9:15am, but the Homeowner's solicitor said that he had assumed that the hearing was commencing the following day "[b]ecause that's the notice I've seen", and that he was not in a position to proceed that day. The Builder's solicitor submitted that the Builder was "extremely prejudiced" by the matter not proceeding. The Tribunal noted on several occasions that "'that' might be something relevant to a costs application".
10. The Tribunal adjourned the hearing to the following day.
11. However, the Builder's written submissions as to costs did not seek any specific order relating to the costs thrown away of the first day of the hearing. Perhaps the Builder thought it was not necessary to make a separate application for costs of the first day given it was making an application for all its costs (and on the indemnity basis no less). But those costs were never sought at first instance, and we do not think it appropriate that those costs now be sought on appeal.
12. In our view, there was no error by the Tribunal in its reasons for decision in relation to costs of the Homeowners' application. We have identified no question of law, and leave to appeal should be refused and the appeal otherwise dismissed.

Other matters

1. There are a number of other matters raised in the Builder's grounds of appeal or at the appeal hearing on which we think it appropriate to comment briefly.

Fraud

1. The first is that the Homeowner's claim was fraudulent in that she sought $120,000 for rectification costs but filed no evidence to support that claim.
2. The costs of rectifying the works as ordered by the Tribunal may or may not be in the order of $120,000.00. But it does not follow that just because there was no evidence to support the claim that the claim was fraudulent.

Bias

1. The second matter on which we wish to comment are the submissions in relation to Grounds Seven and Nine, namely that:

• the Tribunal gave the Homeowner "a massive and unfair advantage by allowing the matter to proceed", based on there being no evidence to support the Homeowner's case;
• the Tribunal "seems to give advantage" to the Homeowner by "allowing the use of photos …, proceeding without a Scot Schedule, ignoring the fact that [the Homeowner] hadn't complied with any Orders.

1. These submissions appear to suggest that the Tribunal was biased.
2. As the Appeal Panel noted in Saurine v Coral Homes Qld Pty Ltd [2015] NSWCATAP 147: 18. Bias can be actual or apprehended: Bogoevski v Stricklands [2015] NSWCATAP 133 at [110]. .... Claims of actual bias are rarely made, and even more rarely upheld. Actual bias usually, but not universally, contemplates an "interest" (whether financial or otherwise) by the judicial officer (in this case the Tribunal member) in the outcome of the proceedings. No such claim is made in this appeal. In the circumstances, we do accept that the member was motivated by actual bias in the hearing and determination of Mr Saurine's application. 19. What Mr Saurine appears to be suggesting is apprehended bias … 20. The relevant principles in determining whether there is apprehended bias and how they are to be applied were explained by the High Court of Australia in Ebner v Official Trustee in Bankruptcy [2000] HCA 63 at [6], where the High Court stated: "Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge (or other judicial officer or juror), as here, the governing principle is that, subject to qualifications relating to waiver (which is not presently relevant) or necessity (which may be relevant to the second appeal), a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that a tribunal be independent and impartial.
3. Those principles are applicable to this appeal. To the extent that the Builder claims that there was bias, either actual or apprehended, on behalf of the Senior Member constituting the Tribunal, the claim is without foundation, should not have been made, and is rejected.

Section 55

1. The final issue on which we wish to comment is Ground Three. The Builder claims that the Tribunal failed to consider s 55 of the NCAT Act.
2. Section 55 relevantly provides that: 55 Dismissal of proceedings (1) The Tribunal may dismiss at any stage any proceedings before it in any of the following circumstances - … (b) if the Tribunal considers that the proceedings are frivolous or vexatious or otherwise misconceived or lacking in substance.
3. We accept that the Tribunal could dismiss an application before it if it considered that the proceedings are frivolous or vexatious or otherwise misconceived or lacking in substance. While the Tribunal could dismiss proceedings on its own motion, it could not do so without affording procedural fairness to the affected party (here the Homeowner). As no such application was made to the Tribunal, there is no substance to this submission.

Costs of the appeal

1. Rule 38A of the Rules provides that despite s 60 of the NCAT Act, the Appeal Panel must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.
2. As we have found, the correct costs rule for both the Builder's application and the Homeowner's application is r 38 and therefore ordinarily "costs follow the event".
3. Clearly, the Builder has been successful in relation to the costs of the Builder's application. It is therefore entitled to its costs of prosecuting that appeal.
4. As to the costs of the Homeowner's application, the Builder has been unsuccessful.
5. A court or tribunal may deprive the successful party of the costs relating to an issue on which the successful party lost when that issue was clearly dominant or separable: Monie v Commonwealth of Australia (No.2) [2008] NSWCA 15 at [64].
6. This principle was the subject of discussion by the Tribunal in Health Care Complaints Commission v Emery (No. 2) [2017] NSWCATOD 23 at [11] - [19]. In summary: (1) unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed; (2) exercising the discretion as to costs on an issue by issue basis can produce complexity and disputation; in determining the proper costs, the appropriate approach is a broad-brush approach: Harrington Estates (NSW) Pty Ltd t/as Harrington Grove Country Club v Turner [2016] NSWCA 369 at [72]; Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [18] - [19]).
7. Some little time was taken in submissions and the hearing about the Builder's costs in the Homeowner's application.
8. In the circumstances, adopting a "broad brush approach", we propose to order that the Homeowner pay 80% of the Builder's costs of the appeal.
9. If the either party seeks some other costs order:

• they must file with the Registry and give to the other party submissions within 14 days of these reasons;
• the other party may respond within a further 14 days;
• the other party may reply within a further 7 days.

1. Each submission must be limited to three pages.
2. We propose to decide any application for costs "on the papers" and without a hearing, pursuant to s 50(2) of the NCAT Act. If either party opposes this course, they should that address that issue in their submissions.

Orders

1. The Appeal Panel orders: 1. In relation to the costs decision of the Tribunal in HB 21/17092: 1. the appeal is allowed; 2. order (2) of 23 August 2023 is set aside and in lieu thereof it is ordered that the respondent pay the applicant's costs as agreed or as assessed. 1. In relation to the costs decision of the Tribunal in relation to HB 21/19049 1. leave to appeal is refused; 2. the appeal is otherwise dismissed. 1. In relation to this appeal, subject to order (4) the Appeal Panel proposes to order the respondent to pay 80% of the costs of the appellant. 2. If the either party seeks some other costs order: 1. they must file with the Registry and give to the other party submissions within 14 days of these reasons; 2. the other party may respond within a further 14 days; 3. the other party may reply within a further 7 days.

Endnotes

1. We assume that Mrs Harris means that she did not send that transcript to the Senior Member.
2. Again, we assume that Mrs Harris means that she did not send that transcript to the Senior Member. 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 2023