Sanna Construction Pty Limited v Kelly No 2

(1) Her costs of the appeal amounted to $11,892, itemised as follows (copies of the two invoices from Aubrey Brown were attached):

$3,041.50 (Aubrey Brown, solicitors, 28 October 2024)

$8,442.50 (Aubrey Brown, solicitors, 28 November 2024 - incorrectly referred to in submissions as dated April 2025)

$50 (NCAT sound recording)

$100 (NCAT sound recordings x 2)

$154 (transcript costs)

(2) The success of the seventh ground of appeal does not merit any discount from a costs order that would otherwise be made - or at most a discount of 5 per cent - because it was not raised by the Builder, and was raised only by Mr Sanna after he had been joined by the Tribunal as a party to the appeal on 9 October 2024, when he filed submissions on his own behalf.

(3) The seventh ground only occupied a small proportion of the material filed by the appellants and of the attention of Ms Kelly, though it did occupy some time at the hearing of the appeal.

(4) There should be no costs order in favour of Mr Sanna.

(5) Costs should be quantified by the Tribunal rather than referred to assessment, because they are "(a) reasonably small and (b) easily attainable [sic, ascertainable] and identifiable", and they are modest when viewed in light of the volume of material filed on appeal by the appellants. Ms Kelly would prefer to forego her costs of obtaining recordings and transcript, rather than be referred to assessment.

1. We note that the amounts sought by the respondent when correctly calculated come to the sum of $11,788.

(1) No costs order should be made against him personally, as 'I was removed from the proceedings in my personal capacity, and the appeal continued solely against Sanna Construction Pty Limited'.

(2) Ms Kelly unilaterally garnished his personal bank account.

(3) The invoice which Ms Kelly said was issued by her solicitors in April 2025 could not relate to work done on the appeal, because it was many months after the hearing on 26 November 2025.

(4) The solicitors' invoice dated October 2024 'should be partially discounted', because Mr Sanna was a party during the relevant period, and at least some of the work must have been directed to the claim against Mr Sanna, who was ultimately removed as a party by the Tribunal.

1. In a supplementary submission, Ms Kelly acknowledged that she was in error in submitting that her solicitors issued an invoice in April 2025. She says it was issued in November 2024. She provided a copy with her original submissions. It is dated 28 November 2024. We are satisfied that it relates to work done in respect of the appeal proceedings.

1. In accordance with the principle that costs should follow the event, an award of costs of the appeal should be made in favour of Ms Kelly.
2. We do not consider that any deduction should be made because of the success of the seventh ground of appeal. This is because the success followed a point raised by the Appeal Panel at the hearing of the appeal, with the consequence that there were no additional costs incurred by Ms Kelly in connection with this point.
3. Due to the success enjoyed by Mr Sanna on the appeal, no order should be made against him personally in respect of Ms Kelly's costs.
4. As to the making of a lump sum order for costs, in a number of cases the Appeal Panel has recognised a power to make such an order pursuant to s 60 of the Civil and Administrative Tribunal Act 2013 (NSW) and has proceeded to make such an order: see, for example, Allsopp v Owners Corporation SP 6006 [2024] NSWCATAP 93 and News v Cotes (No 2) [2019] NSWCATAP 235; cf 203 Castlereagh Street Pty Ltd v Skybloo Holdings Pty Ltd [2017] NSWCATAP 29. We note that in the two cases first mentioned the amount ordered was a relatively modest amount and involved a significant discount in respect of the solicitors' costs that were actually incurred.
5. In Michael Wilson & Partners v Emmott (No 2) [2024] NSWCA 309 (Emmott), the Court of Appeal applied the principles relevant to the making of a gross sum costs order as set out in Hamod v State of New South Wales [2011] NSWCA 375 and as stated in Gabrielle v Abood (No 4) [2023] NSWCA 100, where the Court (Bell CJ, Kirk and Adamson JJA) said at [6]:

The power to make a gross sum costs order provided by s 98(4)(c) of the Civil Procedure Act 2005 (NSW) is discretionary. Authority establishes that the discretion is not confined and may be exercised whenever the circumstances warrant its exercise; it should only be exercised when the Court considers that it can do so fairly between the parties, and that includes having sufficient confidence in arriving at an appropriate sum on the materials available; courts have typically applied a discount in assessing costs on a gross sum basis; and the court is not required to undertake a detailed examination of the kind that would be appropriate to taxation or formal costs assessment: see Hamod v New South Wales [2011] NSWCA 375 at [813]- [820] and authority there cited.

45. In the present case, as adverted to above, the evidence as to the costs incurred by the respondent is more than sufficient to enable an assessment of a gross sums costs order to be made. This is appropriate where the amount sought is relatively small and the costs of assessment are likely to be disproportionate to the amount that may reasonably be in issue on assessment. The Court on a gross sum costs application does not apply a process similar to a taxation of costs, but adopts a much broader brush. A discount is ordinarily warranted to reflect the contingencies ordinarily inherent in the assessment process. That said, one must be astute to avoid both overstating the recoverable costs and underestimating the appropriate amount by applying some arbitrary discount to the amounts claimed.

46. In all the circumstances it is appropriate in our opinion to fix the gross sum costs order by: (1) allowing 85% of the solicitor's costs, including in respect of the costs of the preparation of this gross sum costs application (being a conservative discount of 15% rather than the 35% that the applicant suggests); (2) allowing the whole of Counsel's fees and disbursements (which are not on their face excessive), including in respect of the costs of the preparation of this gross sum costs application; (3) applying a further discount of 10% to the sum of the solicitor's and Counsel's costs so calculated, to take into account contingencies inherent in the taxation process and the complaints made by the applicant as to the components included in the costs claimed; and (4) adding to that figure the filing fee for this application (in full).

1. In Emmott the Court had before it evidence from the respondent's solicitor as to the discounts applied in the assessment of costs.
2. We consider it is appropriate to make a lump sum costs order in order to avoid further delay and the potential expense of a costs assessment. We also take account of the following factors:

(1) the appellants do not object to the making of a lump sum costs order,

(2) the actual costs incurred are the subject of only two invoices of limited scope, and

(3) no complaint is made by the appellants about the hourly charge out rate applied or about any specific items in the invoices or about the amount of time spent in relation to any item in the invoices.

1. In arriving at our quantification of the lump sum order, we also consider that_:_

(1) the solicitors' hourly charge-out rate applied ($350 per hour) appears to us to be a reasonable amount in relation to this matter. No Counsel fees formed part of the costs incurred;

(2) the work carried out is, largely, identified and appears to us to be well within the bounds of the work and time taken that could be reasonably expected, particularly, when regard is had to the extensive factual matters raised by the appellants in the appeal. The extensive nature of such matters is apparent from paragraphs [9] and [40] of our substantive reasons; and

(3) a discount of 25% should be applied to the costs incurred. In the absence of evidence to the contrary, we have been guided by the discounts referred to by the Court of Appeal in Emmott. Our quantification of this discount (a lower discount than applied in Emmott) has had regard to the reduced scope of contingencies arising on a taxation in view of the matters we have already referred to in paragraphs 20 (2) and (3) and paragraphs 21 (1) and (2).

1. Accordingly, the amount of the lump sum costs order shall be 75% of $11,788, namely $8,841.

(1) A hearing in respect of the respondent's application for costs of the appeal is dispensed with.

(2) The appellant Sanna Construction Pty Limited is to pay the respondent's costs of the appeal in the amount of $8,841.00.

(3) This amount is to be paid within 14 days of the date of these orders.

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.