Snowtime Tours Pty Ltd v Lavecky

NCAT Appeal Panel|2022-08-22

REASONS FOR DECISION

This is an application for costs made by the respondent in relation to a decision in Snowtime Tours Pty Ltd v Lavecky [2022] NSWCATAP 219.
The substantive appeal proceedings related to a primary decision made by the Tribunal for the appellant to refund to the respondent an amount of $16,419, which the respondent paid for ski accommodation. The respondent was not able to use the accommodation because government travel restrictions were imposed on Sydney residents due to the COVID-19 pandemic.
On 6 July 2022, we dismissed the appeal and made directions for exchange of submissions for an application for costs to be determined. The directions also allowed for submissions as to whether the parties consented to a hearing being dispensed with in relation to the costs application.
The respondent filed written submissions on 13 July 2022. The appellant filed written submissions in response on 20 July 2022 and the respondent filed submissions in reply on 8 August 2022. The appellant raises that the respondent's submission on costs were late and received by email on 13 July 2022. Regarding the short delay in the filing of submissions, we are satisfied we should grant leave to extend time for the respondent's submissions as both parties have had adequate opportunity to relevantly respond to the other party's submissions. The appellant also sent further submissions on 16 August 2022 for which no directions have been made. We have however considered those submissions in our decision.
On that basis we have read and considered the written submissions of both parties.
Neither party sought an oral hearing on the issue of costs. We are satisfied that it is appropriate to deal with the costs application on the papers as a hearing would amount to further unnecessary costs to the parties. Accordingly, we have made an order dispensing with a hearing.

Leave for legal representation - conditional

The respondent submits that at a call over hearing before the Appeal Panel on 12 November 2021, the respondent sought leave to be legally represented and submitted to conditional leave, on the condition that he would not seek to recover his legal costs. Leave was granted for legal representation. No condition about recovering legal costs appears on the notice of order provided to the parties on 12 November 2021. However, the respondent has disclosed it was agreed to. The respondent is seeking that to the extent required, any condition on the respondent's ability to recover his costs in the appeal be varied to enable us to make the costs order.
We accept that although it is not contained in the orders of 12 November 2022, leave for legal representation was granted on the basis that the respondent would not be seeking legal costs. There was no order made reflecting that condition. In our view, even if an order was omitted and it was intended that the order granting leave for legal representation was conditional, that decision was made at an interlocutory stage and in our view such a condition can be varied or set aside if we are satisfied that there are special circumstances which would warrant the making of the costs order. The fact that the respondent proposed leave for legal representation on that condition, is of course relevant to the weighing up of the discretion as to whether there are special circumstances and whether to make an order for costs.

Costs of the Appeal

Section 60 (1) of the Civil and Administrative Tribunal Act 2013 (NCAT Act), requires that each party bear their own costs. However, pursuant to s 60 (2) of the NCAT Act, a cost order can be made if "special circumstances" are established.
Rule 38 of the Civil and Administrative Tribunal Rules 2014 (NCAT Rules) states that despite section 60 of the NCAT Act, the Tribunal may award costs in proceedings in the absence of special circumstances warranting such an award if the amount claimed or in dispute in the proceedings is more than $30,000. The amount in dispute in this appeal was less than $30,000 and on that basis the respondent must establish special circumstances to warrant a costs order being made in his favour. That does not appear to be disputed by the parties.
In the written submissions of the respondent dated 9 July 2022, the respondent confirmed he was not pressing for costs of the entire appeal. Instead, the respondent is seeking an order for the appellant to pay the respondent's costs thrown away of the adjourned hearing on 10 February 2022, including his costs of the costs application.

Respondent submissions

The respondent submits that a costs order should be made for the reasons that follow.
At the initial call over before the Appeal Panel on 12 November 2021, the appellant was made aware of the requirement to obtain a sound recording of the primary hearing. The orders required the appellant to serve all documents by 22 December 2021. The standard notation contained in the orders include the following relevant statements: (1) If a party does not lodge with the Appeal Panel and give to the other parties documents, sound recordings and submissions as directed above, that party may not be allowed to rely on those documents, sound recordings and submissions at the hearing of the appeal. … (4) If a party wishes to rely on a sound recording of a hearing, the party must identify for the Appeal Panel which parts of the sound recording are relied in their written submissions.
The appellant obtained a sound recording of the Tribunal hearing but served only a few transcribed extracts of that recording.
The matter was initially listed for hearing before the Appeal Panel (constituted by Senior Member Wilson and Senior Member Burton) on 10 February 2022 and was adjourned to 3 June 2022 to allow the appellant to provide a complete transcript. The respondent submits that the adjournment was granted in circumstances where one of the appeal grounds asserted was a denial of procedural fairness; that is an assertion that the "onerous term" issue was not raised at hearing and so the appellant was not afforded an opportunity to respond to it before an adverse finding was made against it in the primary proceedings. The respondent opposed the adjournment on two bases: 1. the adjournment would not further the guiding principle of the Tribunal where any denial of procedural fairness was immaterial, in that it would not affect the eventual outcome, where the appellant's case on contract frustration was wrong at law; and 2. the respondent had submitted to a condition that it would not seek its costs and so the costs prejudice to the respondent in respect of the adjournment, significant in proportion to the amount in dispute, would not be able to be cured by any costs order for wasted costs.
The adjournment was granted against the objections of the respondent. At the hearing on 10 February 2022 the Appeal Panel granted the adjournment but noted that the respondent could cure its costs prejudice by way of an application following the final hearing to vary the condition on which leave was granted to it, such that it could seek to recover any costs thrown away.
The appellant's conduct in failing to serve a complete transcript, as it was ordered to do on 12 November 2021, unnecessarily disadvantaged the respondent because it caused an adjournment of the hearing on 10 February 2022 in circumstances where: 1. the need for a transcript arose in the context of a contention by the appellant which was bound to be "inconsequential" to the overall outcome of the appeal, being precisely the eventual finding by the appeal panel; and 2. the respondent was put in a position where it had limited means of recourse as to its costs prejudice of the appellant's conduct, given the condition it submitted to at the 12 November 2021 call over hearing.

Appellant submissions

The appellant submits that a costs order should not be made for the reasons that follow.
At the 12 November 2021 call over hearing, the appellant opposed the respondent being legally represented. The appellant submits that the reason given by the respondent for having legal representation was that he was too busy to handle the matter himself and that leave was granted to the respondent to be legally represented on condition that no costs could be claimed.
Prior to the 10 February 2022 appeal hearing the appellant had provided to the respondent and the Tribunal, a copy of the sound recording of the primary hearing. The appellant also provided excerpts of key parts of the sound recording that they believed were relevant to the appeal. The appellant was not asked to provide a full transcript of the entire hearing and the full transcript was asked for by the Appeal Panel at the 10 February 2022 hearing, only after the Appeal Panel decided it was in the best interests of the case. The appellant submits that it was through no fault of its own or lack of preparation that the hearing on 10 February 2022 was adjourned.
At the hearing on 10 February 2022 the respondent did not seek to have the condition on costs varied and after the matter was adjourned the respondent was still entitled to represent himself at the further final hearing.
Adjournments should be anticipated as possibilities. The appellant submits that the appeal was not frivolous. It involved an untested situation relating to frustration of a contract and only arose due to Government imposed COVID travel restrictions. The appellant submits that prior to appealing he was led to believe that costs are only awarded by the Tribunal in extreme circumstances and for that reason the appellant represented themself.
The reason the appeal panel sought the full transcript was to check on the issue of the "no show clause" and the appellant asserts that in the final decision the Appeal Panel identified the appellant was correct on this issue of the no show clause and in essence the appellant won that part of the legal argument.
The hearing on 10 February 2022 was scheduled to take half a day, but it only took under one hour. The final hearing before us took about 90 minutes. The combined total hearing time was less than the half day originally allocated.
The appellant has not specified an amount of costs being asked for in their submission

Consideration

Having considered the parties submissions, we are satisfied that the respondent has established special circumstances which warrant the making of an order for costs thrown away necessitated by the need to adjourn the matter on 10 February 2022.
We are satisfied that the appellant was responsible for unreasonably prolonging the proceedings. Despite the appellant's assertions to the contrary, there was no tenable basis that the alleged "no show clause" was a contractual term which dealt with what would happen on the occurrence of the alleged frustration event. Further, the appellant's argument that frustration requires "reasonable foreseeability" of the frustration event was unsupported by authority and untenable.
We accept that the respondent had agreed to leave for legal representation to be granted on condition that he would not recover costs, he has appropriately not sought costs for the entire proceedings. He has sought only those costs thrown away, necessitated by the need for an adjournment to allow the appellant to provide a full transcript. Those are costs, which in our view arose by circumstances that were out of the ordinary. Adjournments should not be anticipated as possibilities in proceedings. The appellant should have been prepared to proceed at the hearing on 10 February 2022 and it is the failure of the appellant to provide the full transcript of the primary hearing which led to the need for the adjournment
The applicant was claiming, as a ground of appeal, a lack of procedural fairness. He alleged that the proceedings had been determined on the basis that a term of the contract was onerous and that had not been raised at the primary hearing and the appellant had not had an opportunity to address the issue. It would have been clear that such a ground would require a transcript of the entire recording to determine if the issue had been raised at the hearing. The standard notation in the orders of 12 November 2021 directs a party who wishes to rely on a sound recording of a hearing, to identify for the Appeal Panel which parts of the sound recording are relied in their written submissions.
We also do not agree that the principles relating to frustration of a contract are untested. The principles relating to frustration are well established. While the factual scenario relating to government imposed COVID travel restrictions, may be new, the application of the principles of frustration remain the same.
There is no basis for the appellant to believe that costs are only awarded by the Tribunal in "extreme" circumstances. The legislation makes clear that the test is "special circumstances". "Special circumstances" are circumstances that are out of the ordinary, but not necessarily exceptional or extraordinary. The discretion to award costs must be exercised judicially having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs: Mergerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11].
It is unclear whether the Appeal Panel had received the recording of the primary hearing by 10 February 2022. However, it was the transcript of the recording that was required and there is no evidence that the transcript in its entirety had been provided to the Appeal Panel. Moreover, the Appeal panel would not have adjourned for the reasons it did if it had the entire transcript.
The submission of the appellant that the time spent at the hearing on 10 February 2022 and before us on 3 June 2022 totalled half a day, is misconceived. The attendance required by the legal representatives was over two different days, regardless of how long the hearings took.
In relation to the appellant's submissions raising that there has not been a particularisation of the amount for costs sought, the respondent is not seeking a fixed amount costs order and we do not propose to make a fixed costs order. The respondent did provide an itemised bill of costs and the appellant has disputed the amount in the submissions provided on 16 August 2022. The respondent is not seeking a fixed costs order in this appeal. On that basis the amount of the costs is not relevant to our determination as we propose to make the order on the basis that costs are awarded as agreed or assessed. The issues raised by the appellant are matters that can be dealt with in costs assessment should it become necessary.

ORDERS

Accordingly, the Tribunal makes the following orders: 1. An oral hearing on the issue of costs is dispensed with under s 50 (2) of the Civil and Administrative Tribunal Act 2013 (NSW). 2. The appellant is to pay the respondent's costs thrown away of the adjourned hearing on 10 February 2022, including his costs of the costs application as agreed or assessed on or before 6 September 2022. 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: 22 August 2022

At a glance

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Decision date

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Judgment (7 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (2)