Scharer v Giro Construction Group Pty Ltd

The decision of 7 September 2016

1. On 7 September 2016 the Tribunal ordered that the proceedings be dismissed and the Applicants pay the Respondent's costs as taxed or agreed. An appeal and an application for leave to appeal is brought from those orders.
2. The first point to note is that as recorded in that decision below ([7] and [8]) the dismissal decision was by consent of both parties. Although the Amended Notice of Appeal to us formally challenges that order, the Appellants' submissions to us at [31] resile from that formal document by accepting that the dismissal order made below should remain. There is accordingly no reason to further consider the order dismissing proceedings HB 14/495581.
3. It follows that the only remaining issue before us is the costs of the proceedings below.
4. The Tribunal below proceeded to make an order for costs against the Applicants. The member below (correctly) considered that Rule 38 of the Civil and Administrative Tribunal Rules 2014 applied to permit the award of costs 'even in the absence of special circumstances': cp Civil and Administrative Tribunal Act s 60.
5. The Tribunal's essential reasoning was that the previous ruling delivered on 10 February was that the Applicants never had standing to proceed against the Respondents, the latter were thus, clearly, the successful party, and that to award costs would be to follow the reasoning of McHugh J in Oshlack v Richmond River Council [1998] HCA 11 at [67], where his Honour said: 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. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.
6. The Tribunal also noted there was no disentitling conduct by the Respondent.
7. A decision about costs concerns a matter of practice and procedure, and one concerning which we do not propose to grant leave to appeal in circumstances where there was the unremarkable application of principle to the facts, involving no discernible error of principle in circumstances where, we repeat, the dismissal of the proceedings was by consent of both parties.

The effect of the Respondent's administration

1. That would normally be the end of the matter but for the fact that there is an asserted question of law as to whether the Tribunal below had jurisdiction to make an order for costs when the Respondent in whose favour the order was made was in liquidation or administration. The Tribunal considered that argument and dismissed it expressly adopting by reference to submissions made by the Respondent: [see 21 below]. We discern no error in those reasons.
2. The essential complaint about that consent made to us is that it was impermissibly piecemeal in relation to costs: that is, it would appear to have precluded an application for costs by the Applicants.
3. However, as the decision below made clear there never was such an application in view; rather the relevant application by the Applicants was dismissal with no order as to costs. Thus, the Respondent's consent was dealing fully with the litigation as it stood. The consent did not impede the Applicants making any submissions it wished as to why there should be no order as to costs as opposed to the order made.
4. In those circumstances no question of law arises: assuming but not deciding that s 440D applied in such a way as to preclude the costs application without the administrator's written consent, there was such consent to all possible circumstances then in view in the litigation.
5. In those circumstances we do not need to decide whether the Tribunal in this matter and below was a "court" within the meaning of s 440D of the Corporations Act, let alone whether it was a "court" for other purposes.
6. Those interesting questions can await the occasion when they must be decided. We are nevertheless grateful for the written submissions received, including from the Attorney-General, when such issues appeared likely to require resolution.
7. The respondent took no part in this appeal.

Order

1. We therefore order:: 1. Appeal and application for leave to appeal dismissed. No order as to costs of the appeal. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar 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

Amendments 20 July 2017 - File under Appeal corrected to HB 14/49581 from HB 14/495581 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 2017