Sahyoun v Owners Corporation Strata Plan 75123

Judgment (6 paragraphs)

[1]

Introduction

On 23 November 2014, the Appeal Panel refused to allow the appellants to lodge an appeal out of time and otherwise dismissed the appeal: Sayhoun v Owners Corporation Strata Plan 75123 [2014] NSWCATAP 112. The respondent now seeks an order that the appellants pay the costs of the appeal. Both parties have provided written submissions and the application has been determined on the papers, that is, without an oral hearing.
For the reasons that follow we are satisfied that the appellants should pay the respondent's costs of the appeal, as agreed or, if not agreed, as assessed on the basis set out in the Legal Profession Act 2004 (NSW).

[2]

Relevant Law

Section 60 of the Civil and Administrative Tribunal Act 2013 (the Act) sets out the law governing costs in many proceedings before the Tribunal, including the Appeal Panel: 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: 1. (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, 2. (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, 3. (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, 4. (d) the nature and complexity of the proceedings, 5. (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, 6. (f) whether a party has refused or failed to comply with the duty imposed by section 36(3), 7. (g) any other matter that the Tribunal considers relevant.

Parties' Submissions

The respondent submits that there are a number of "special circumstances" warranting an award of costs including the unreasonable prolonging of the proceedings, the relative strength of the claims made by each of the parties and the nature and complexity of the proceedings. Because of that complexity the respondent says it was obliged to retain the services of legal advisors. The complex legal issues were said to relate to: 1. submissions that the Tribunal at first instance had failed to exercise it jurisdiction properly, or at all; 2. denial of procedural fairness; 3. applications for adjournment; 4. admissibility of expert evidence; and 5. liability, quantum and the weight to be given to evidence.
Furthermore, because leave was refused for the appeal to proceed out of time, the usual order in litigation, that "costs follow the event" should apply.
The respondent relies on the following remarks of McHugh J in Oshlack v Richmond River Council (1998) 193 CLR 72 at [67]: The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party.
According to the respondent, as it did not conduct itself in a way that should disentitle it to the costs of the appeal, there are no circumstances that might provide a basis for departing from the rule that costs for the event.
The appellants submit that they were entitled to apply for leave to appeal, that they conducted the proceedings in a quick and cheap fashion and that they did not unreasonably prolong the completion of the proceedings. They say that the Appeal Panel did not find that the proceedings had no tenable basis in fact or in law. They also submit that the proceedings were not overly complex and did not involve significant volumes of evidence or other documentation. As the substantive proceedings were determined 'on the papers' the costs were kept to a minimum. The appellants also note that there was no finding that the appeal was frivolous or vexatious, misconceived or lacking in substance.

Consideration

We do not accept the respondent's submission that costs should "follow the event." The remarks of McHugh J in Oshlack v Richmond River Council at [84] must be understood in the context of s 69(2) of the Land and Environment Court Act 1979 (NSW) which relevantly provided that costs were in the discretion of that Court, and the Court could determine by whom and to what extent costs are to be paid.
The costs rule in this case is that each party is to pay their own costs. The Tribunal may order a party to pay costs only if it is satisfied that there are special circumstances warranting an award of costs.
Apart from noting that the appellants had appealed unsuccessfully to the District Court before appealing to the Appeal Panel, the respondent did not provide any evidence or submissions as to how the appellants had unreasonably prolonged the proceedings.
The Appeal Panel dealt with the merits of the appeal in the 'out of time' decision: Sayhoun v Owners Corporation Strata Plan 75123 [2014] NSWCATAP 112. The appeal was based on a total of 14 alleged errors relating to jurisdiction, the identification of the correct respondent and evidence. In the substantive decision, the Appeal Panel found that the appellants had misconstrued the Tribunal's finding as to jurisdiction. We were not satisfied of the merits of the grounds of appeal relating to the identity of the respondent or the merits of the grounds relating to evidence: Sayhoun v Owners Corporation Strata Plan 75123 [2014] NSWCATAP 112 at [20] - [43]. One basis for refusing to extend the time for the lodgment of the appeal was that the appellants had little if any prospects of success on appeal. The weakness of the appeal is a "special circumstances" warranting an award of costs: s 60(3) (c).
There is another matter which warrants an award of costs: s 60(3)(g). The Tribunal below ordered the appellants to pay the respondent $210,725. These proceedings were determined in the former Consumer Trader and Tenancy Tribunal when s 53 of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) provided that the Tribunal may, in accordance with the Regulations, award costs in relation to any proceedings. Regulation 20(4) of the Consumer, Trader and Tenancy Tribunal Regulation 2009 relevantly provided that: In any proceedings in respect of which the amount claimed or in dispute is more than $30,000, the Tribunal may award costs in relation to the proceedings ii such circumstances as it thinks fit.
In the absence of any circumstances which make it unjust or unreasonable, this rule results in the unsuccessful party paying the successful party's costs: Ohn v Walton (1995) 36 NSWLR 77 at 79.
Regulation 20(4) has been repealed but was re-enacted in similar terms in rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW). When the amount in dispute is more than $30,000, the Consumer and Commercial Division of the Tribunal may award costs at first instance even in the absence of special circumstances warranting an award. While that rule does not apply on appeal, it is a factor which the Appeal Panel may take into account in deciding whether special circumstances exist.
In our view, the costs rule at first instance, together with the amount of money involved, constitutes a special circumstance in this case. While not extraordinary or exceptional, it is out of the ordinary. That matter, as well as the weakness of the appeal, warrants a costs order being made against the appellants.

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Judgment (6 paragraphs)

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