Sun v Li

The underlying proceedings and the appeal

1. The proceedings underlying the appeal were heard by Senior Member Meadows of the Consumer and Commercial Division of the Tribunal on 10 December 2015. The proceedings involved a building dispute between the owner Mr Jing Sun and The builder Mr Jun Li. The Appellant/Owner's claim was that he be paid $99,000, later reduced to $58,000 by the Respondent/Builder. The Respondent/Builder had also commenced proceedings seeking payment to him by the Appellant/Owner of approximately $40,000.
2. The Appellant/Owner was ordered to pay the Respondent/ Builder the sum of $7,230.00, being goods and services tax ("GST") payable on the amounts invoiced. The Respondent/Builder's claim was otherwise dismissed. The Tribunal ordered the Respondent/Builder to pay the Appellant/Owner the sum of $31,523.58. The Tribunal set off these two amounts, so the Respondent/Builder was ordered to pay the Appellant/Owner the balance of $24,293.58.
3. Each of the parties appealed from the Tribunal's decision.
4. For completeness it should be noted that in its reasons for decision issued on 10 December 2015 the Tribunal allowed the Appellant/Owner $28,657.80, but the Appellant/Owner then claimed that this figure ought properly to include GST and he sought to be heard on costs. Accordingly the Tribunal amended its reasons on 12 January 2016 and allowed the Appellant/Owner $28,657.80 plus GST being the total award of $31,523.58. It did not make any arrangements for a hearing as to costs. Indeed, that omission was one of the matters the subject of the appeal
5. The appeal was heard by the presently constituted Panel on 20 April 2016. The Appeal Panel refused leave for the Respondent/Builder to appeal and dismissed his appeal. The Panel however allowed the appeal of the Appellant/Owner in part. It allowed his appeal in respect of: 1. the failure of the original Tribunal to deal with the issue of the provision to him of certain certificates, such as the anti-termite work and waterproofing; and 2. the failure of the original Tribunal to hear him on the question of costs.
6. Each of those questions was remitted to the Tribunal as originally constituted for determination.
7. In all other respects the Appeal Panel refused leave for the Appellant/Owner to appeal and dismissed his appeal.
8. The overall result was that the Appellant/Owner succeeded on two of his 6 grounds of appeal, being the two matters referred to in paragraph 8 above, but otherwise his appeal failed.
9. The appeal lodged by the Respondent/Builder failed.

The statutory regime under s60 Civil and Administrative Tribunal Act and the Civil and Administrative Tribunal Rules

1. The Tribunal's jurisdiction to consider costs applications and its power to make costs orders are set out in section 60 of the Civil and Administrative Tribunal Act, 2013. The basic rule of the statutory framework for the costs jurisdiction, as set out in s 60(1), is that each party must pay his or her own costs. Subsection (2) allows the Tribunal to award costs in relation to proceedings before it, but "only if it is satisfied that there are special circumstances warranting an award of costs."
2. Subsection (3) sets out particular factors to which the Tribunal may have regard in determining whether there are special circumstances. The factors listed in that subsection are: 1. whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, 2. whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, 3. 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. the nature and complexity of the proceedings, 5. whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, 6. whether a party has refused or failed to comply with the duty imposed by section 36 (3),and 7. any other matter that the Tribunal considers relevant.
3. In respect to matters in the Consumer and Commercial Division of the Tribunal, however, regard must also be had to rules 38 and 38A of the Civil and Administrative Tribunal Rules, 2014. Those rules provide: 38 Costs in Consumer and Commercial Division of Tribunal (1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal. (2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if: (a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made a order under clause 10(2) of Schedule 4 to the Act in relation to the proceedings; or (b) the amount claimed or in dispute in the proceedings is more than $30,000. 38A Costs in internal appeals (1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of: (a) the enabling legislation; (b) the Division Schedule for the Division of the Tribunal concerned; or (c) the procedural rules. (2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.
4. These appeals were each filed after 1 January 2016. Accordingly, in determining costs of the appeals, by reason of Rule 38A, the Appeal Panel is bound to apply the first instance costs provisions.
5. Because the amounts claimed or in dispute in each of the matters before the Tribunal, were in excess of $30,000 Rule 38 gave the Tribunal at first instance the discretion to award costs even absent special circumstances warranting the award of such costs.
6. Accordingly, the Appeal Panel has the power to award costs of the appeals absent special circumstances.
7. Thus, the power to award costs of the Appeal is discretionary. It is the circumstances and conduct of the appeals which are relevant to the exercise of the discretion.

The grounds on which the Appellant claims costs

1. In his written submissions filed on 3 June 2016 the Appellant claimed a total of $858 for his costs of the appeal. He based his claim on 7 grounds which we have done our best to summarise below. They were: 1. The appeal was partly successful. The Appellant also claimed that we should take into account the amendment of the original decision, as described in paragraph 7 above. 2. The case made by the Respondent on appeal was frivolous or vexatious or otherwise misconceived or lacking in substance. The claim was made without tenable basis in fact or law. 3. The Tribunal should view the Appellant as the "innocent party" who had suffered a "huge loss" which the Appellant quantified at over $150,000, because of the seriously defective works undertaken by the Respondent. 4. The Responded as builder did not perform in a proper and workmanlike manner or in accordance with the plans and specifications for the building work. 5. The Respondent had unreasonably locked the Appellant out of the premises. This proved his clear intention not to be bound by the terms of the contract. 6. The Respondent's actions of removing sliding doors and fly screens caused serious damage. 7. All the losses to the Appellant were caused by unreasonable actions by the Respondent and it was therefore unfair for the Appellant to bear the costs of appeal.

Principles to be applied

1. As we have observed, by reason of the application of Rule 38A, we must apply the first instance costs rules. By reason of Rule 38(2)(b), costs may be awarded for the appeal without regard to whether there exist special circumstances warranting the award of costs.
2. The relevant principles regarding the operation of Rule 38 were recently considered in Bonita v Shen [2016] NSWCATAP 159 at [58]-[73]. We note that this analysis included reference to the observation at [64] that where, as here, there is a general discretion to award costs, there is no absolute rule that the successful party must receive the costs.

Consideration

1. The Appellant's grounds set out in (3) to (7) above are palpably late assertions of matters of fact, or repetition of matters which were asserted by the Appellant in one form or another at the original hearing or on appeal. Those assertions are not supported by the findings in the original hearing and have not been overturned by the Appeal Panel on appeal.
2. The facts and findings relevant to be considered when assessing a claim for costs in relation to appeal ordinarily would be those which were established below and relevant to the appeal, or made below and challenged on appeal. It is now far too late in the day for the Appellant/Owner to be introducing new assertions in support of his claim for costs of the appeals. Additionally, he cannot seek to re-agitate matters which have been dealt with adversely to him below or on appeal. None of the matters asserted in paragraphs (3) to (7) can be relied upon to justify our making an order for costs in favour of the Appellant.
3. In relation to ground (1) above, even if the Appellant had been completely successful in all 6 of his grounds of appeal, whilst that would be a relevant consideration as to the exercise of the discretion to award costs, it would not necessarily mean that the Appeal Panel would award him his costs. As observed above, there is no general rule that a successful party should get their costs. That is even more so when the party has not been totally successful, relevantly, in the appeal. Success of a party in its appeal, partial or total, is but one element relevant to the exercise of the general discretion which is not confined or fettered in any way save that it must be exercised judicially and not capriciously. Other relevant factors may include the manner in which the parties conducted the proceedings, the prospects of success of claims made and the like.
4. In our opinion, although the Appellant/Owner was successful in 2 out of 6 of his grounds of appeal that, of itself, does not persuade us that he should be entitled to his costs of the appeals. There were in these appeals a significant amount of material put before the Appeal Panel. There were folders of material with hundreds of pages of documents. Only a very small amount of those documents were referred to. In saying that, we do not mean to be too critical of the Appellant/Owner as he was self-represented and perhaps did not apply the restraint on provision of materials that would be expected of a legal practitioner. However, in the submissions filed in support of the application for costs, there was no attempt by the Appellant to segregate his costs according to whether they were in respect of the two successful grounds or the 4 unsuccessful ones and we did not understand him to be submitting a claim for a proportional part of his total costs.
5. In relation to ground (2) in neither the original hearing nor the appeal hearing did the Appellant raise what might well be summarised as the "frivolous and vexatious" ground. It therefore also falls into the category of another assertion made very late in the day. In any event, we have regard to the fact that whilst the appeal of the Respondent/Builder failed totally, and probably was never going to succeed, the Respondent/Builder was self-represented and was doing his best to ventilate what we perceived to be legitimately held grievances as to the orders made at first instance. As such, in our opinion, on any reasonable assessment the Respondent/Builder's case could not be said to be a frivolous or vexatious one.
6. The proceedings were of course initiated by the Appellant/Owner. The Respondent/Builder responded, not with a mere denial of liability but with what appears to be a substantial case and indeed with a claim of his own against the Appellant/Owner. That claim was supported by two affidavits and an expert report. The builder made substantial submissions being those filed on 7 August 2015 and 14 August 2015 and appears to have made some approaches to his adversary with a view to minimising or narrowing the issues in dispute. A substantial part of the Tribunal Member's detailed Reasons for Decision consists of a description and analysis of the assertions and contentions of the Respondent/Builder.

The result and the Tribunal's orders

1. For the above reasons, we are not satisfied that there should be an award for costs of the appeals. We will order that each party is to pay their own costs of the appeals. It must follow that the Appellant/owner's claim for costs fails and his application for costs must be dismissed.
2. The orders we make are: 1. The application by Mr Sun for the costs of the appeals is dismissed; 2. Each party is to pay their own costs of the appeals. 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: 29 May 2018