This decision is concerned with the costs of the appeal in a building case dealt with in the Consumer and Commercial Division of the Tribunal, which is the subject of our decision to be found at [2020] NSWCATAP 170. These reasons should be read in conjunction with the reasons in the substantive appeal.
By that appeal, the appellant succeeded in reducing by almost one half the amount it was required to pay the respondent. We decided that it was obliged to pay the respondent $55,840.00 instead of an amount of $99,450.00. However, for the appellant this was partial success only because it had sought to establish on appeal that it was not liable to pay any amount to the respondent.
The parties have provided us with written submissions concerning costs. There is no dispute that we should determine costs without a hearing. We are satisfied that the question of costs can be adequately determined on the basis of the written submissions. Accordingly, pursuant to s 50 (2) of the Civil and Administrative Tribunal Act 2013 (NSW) we have decided to dispense with the hearing on the question of costs and to determine the question on the papers.
Despite the partial success only that it achieved on the appeal, the appellant asked for an order that the respondent pay all of its costs of the appeal, as agreed or assessed. The respondent, on the other hand, asked for an order that the appellant pay all of its costs of the appeal up to the day before the hearing of the appeal and that each party should bear their own costs of the day of the hearing.
By virtue of Rule 38A of the Civil and Administrative Tribunal Rules 2014, Rule 38 of the Rules is applicable to our costs determination because we are concerned with a claim made in the Consumer and Commercial Division and the amount in dispute both at first instance and on appeal exceeds $30,000.00. Accordingly, we are not required to find that special circumstances warrant an order for costs as provided for by s 60 (1) of the Civil and Administrative Tribunal Act 2013 (NSW). The starting point in the exercise of our discretion concerning costs is that a successful party should be entitled to an order for costs in their favour: Thompson v Chapman [2016] NSWCATAP 6 at [69].
Suecha Pty Ltd v VSD Glass & Timber Pty Ltd [2020] NSWCATAP 229 | Case summary | Zoe
For the reasons outlined below, we have concluded that the appellant should pay 50% of the respondent's costs of the appeal, including 50% of the appellant's unsuccessful stay application (the costs of which were reserved), up to and including 22 July 2020 (the day before the hearing of the appeal), and that each party should bear their own costs of the day of the hearing.
The partial success that each party achieved on appeal might suggest that each party should bear their own costs of the appeal. However, in our opinion, there are two matters that require an adjustment to such a potential outcome. First, as outlined below, the respondent enjoyed a greater measure of success on the appeal than the appellant. Second, as acknowledged, implicitly, in the respondent's costs submissions, each party achieved an equal measure of success in relation to the more limited (and, to a large degree, different) arguments that were presented by the appellant at the hearing of the appeal.
As to the greater measure of success enjoyed by the respondent, up to the time of the hearing of the appeal, there were four issues between the parties underlying the considerable variety of contentions raised by the appellant. These were:
1. Whether the appellant, rather than another party, had contracted with the respondent for the relevant works to be carried out on the appellant's development project.
2. Whether the respondent had failed to establish the reasonable value of any of the works carried out by the respondent because some or all of the works the subject of the respondent's claim in quantum meruit had not been completed or had defects that required rectification.
3. Whether the respondent had failed to establish the reasonable value of any of the works carried out by the respondent because there was no evidentiary basis for a conclusion as to such value.
4. Alternatively, whether the respondent had failed to establish the reasonable value of some of the works because there was no evidentiary basis for a conclusion as to such value.
The appellant's grounds of appeal and written submissions raised arguments concerning each of these issues. The appellant achieved a substantial measure of success in relation to the fourth issue only. In essence, the point that succeeded for the appellant on appeal was that there was no basis in the evidence for a finding as to the reasonable value of a number of items of work invoiced by the respondent.
In broad terms, looking at success or failure by the parties in relation to these four issues, the respondent succeeded on liability and with regard to two of the three issues concerning quantum and the appellant achieved substantial success in relation to the one remaining issue concerning quantum.
Judged, therefore, by reference to the grounds of appeal and written submissions of the parties only, it may have been appropriate to award the respondent one half of all of its costs of the appeal on the basis that one quarter of the costs should be deducted from three quarters of the costs to take account of what was payable to the successful party in respect of these four issues.
However, we accept that the costs of the hearing itself should be treated differently and should be approached on the basis that there was an equal measure of success for both parties on the arguments presented.
In arriving at this assessment, we have rejected the appellant's contention that the respondent should pay its costs. No basis for such an award was put forward by the appellant other than its incorrect assertion that it was the successful party on the appeal.
The respondent sought to justify its claim to be awarded all of its costs up to the day before the hearing on two grounds. First, that it was the successful party because it succeeded in establishing that the appellant was liable to it on a quantum meruit basis - a contention that we have already dealt with. Secondly, because of the manner in which the appellant conducted the appeal, which led to substantial wasted costs.
As to wasted costs, the respondent pointed to aspects of our reasons on the substantive appeal, including our references to grounds of appeal that were not pressed, the appellant's abandonment at the hearing of the appeal of all points that sought to rely upon new evidence and that the oral submissions at the hearing of the appeal bore little or no relationship to the written submissions.
We have given careful consideration to what, if any, impact these matters should have on the question of costs. We are not, however, satisfied that there is a proper basis upon which we might make an additional adjustment to the costs award in favour of the respondent by reference to these matters. This is because the respondent has not demonstrated that any of the wasted costs related to the fourth issue, which is the only matter that has led to a reduction in the costs award to be made in favour of the respondent.
The respondent also submitted that Mr Gittany should be made personally liable to pay the costs awarded, along with the appellant. It said that it's submissions on costs to the Tribunal at first instance had included a submission that Mr Gittany be liable for costs because of the finding that he had concocted false evidence in an attempt to defeat the respondent's claim. Various case authorities concerning the making of a costs order personally against Mr Gittany were referred to. The respondent submitted that for the same reasons Mr Gittany should be made personally liable for the costs of the appeal.
We do not agree that we should make any costs order concerning the costs of the appeal against Mr Gittany. The position concerning the costs of the appeal is quite different to the factors that may affect a costs award at first instance (we note that, unfortunately, no decision on the costs at first instance has yet been made by the Tribunal at first instance, a costs question that includes a claim by the respondent for indemnity costs). There was no appeal against the concoction of evidence finding made against Mr Gittany and the points that were raised on appeal were based upon arguments concerning liability and quantum arising from matters that were independent of this very serious finding against Mr Gittany.
Finally, we should also note that we are not dealing with any question concerning the costs at first instance. As we have already mentioned, the parties await a decision on their applications for costs of those proceedings, including an application by the respondent for costs on an indemnity basis.
The outcome of the applications concerning the costs at first instance remains unknown. When a decision in respect of those applications is published the parties will have the opportunity to consider that decision and, subject to the limitations upon the right of appeal from a decision of the Consumer and Commercial Division and the usual constraints regarding appeals from decisions concerning costs, may seek to appeal against that decision. Such an appeal, if brought, will be dealt with by an Appeal Panel in the usual way.
[2]
Order
For the above reasons, we make the following orders:
1. A hearing in respect of the question of costs of the appeal be dispensed with.
2. The appellant is to pay 50% of the respondent's costs of the appeal, including 50% of the costs of the stay application, up to and including 22 July 2020, as agreed or assessed, and each party is to bear their own costs of the day of the hearing of the appeal.
[3]
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
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Decision last updated: 04 November 2020