Sydney Roof Construction Pty Ltd v Varga

1. In this decision we assume a familiarity with the appeal decision, which should be read to gain a complete understanding of the necessary background.
2. This decision concerns:

(1) Issue 1 - The disposition of the appeal against the costs decision made on 5 May 2025, referred to in order our order (5) above.

(2) Issue 2 - The disposition of a miscellaneous application filed by the respondent owners (the owners) following publication of the appeal decision, which application sought an amendment to the amount ordered be paid to them from their solicitor's trust account under order (3).

(3) Issue 3 - The owners' application for costs of the appeal.

1. Given the nature of those issues and the fact that the parties have consented to our determining them without a hearing, on the materials submitted by them, we are satisfied that a hearing should be dispensed with, with respect to each of them.

1. On 18 February 2026, the appellant builder's solicitor advised that the appeal against the costs order was withdrawn. We will therefore dismiss that appeal pursuant to s 55(1)(a) of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act).

1. The Appeal Panel, when granting a stay on 2 May 2025, ordered that the amount of $19,547.60 be paid into the owners' solicitors trust account by the builder. The miscellaneous application asked us to amend the amount to be paid to the owners from that trust account, as specified in order 3 made in the appeal, from "$19,547.60" to "$29.321.40".
2. Put shortly, the owners asserted in the miscellaneous application that the parties subsequently agreed that amount specified in the Appeal Panel order of 2 May 2025 was in error, and had further agreed that $29,321 be paid into the owners' solicitors trust account by the builder. No amendment had been sought to the Appeal Panel's order, and no mention of this discrepancy was made during the hearing of the appeal.
3. We, therefore, had proceeded on the basis that $19,547.60 was held in the trust account.
4. On 30 January 2025, we sent the following directions to the parties:

1. On 21 January 2026, the Respondent filed a miscellaneous application seeking an amendment to our order 3 by replacing the sum "19,547.60" with "29,321.40".

2. If that order is sought by consent of the parties, they shall lodge written and signed consent orders by 6 February 2026.

3. If that order is not sought by consent, then:

a) The Respondent shall file submissions (limited to 2000 words) and evidence in support of that application by 13 February 2026; and

b) The Appellant shall file submissions (limited to 2000 words) in reply by 20 February 2026.

a) Whether the Appeal Panel can determine the miscellaneous application on the papers without a hearing, or whether a hearing is required.

b) The source of the Appeal Panel's power to make such an amendment in the circumstances, with particular regard to whether s 63 of the NCAT Act applies and, if so, how.

1. On 10 March 2026, we sent follow up directions to the parties regarding the respondent's miscellaneous application:

1. Following publication of our orders on 21 January 2026 the respondents filed a miscellaneous application asking us to amend the amount we ordered be paid to the respondents from their solicitor's trust account.

2. We subsequently issued directions on 30 January 2026 requiring the parties to file consent orders relating to the proposed amendment by 6 February 2026, or, if there was no consent, setting out a timetable for submissions relating to the proposed amendment to be filed, closing on 20 February 2026.

3. On 13 February 2026, the respondent's solicitor advised by email that consent orders would be signed and filed within a week and that no submissions would therefore be filed.

4. Signed consent orders have not been filed. No submissions have been made by either party as required in the event of there being no consent orders.

5. Therefore, the Appeal Panel puts the parties on notice of our intention, when considering the costs of the appeal, to also dismiss the appeal against the respondent's miscellaneous application for want of prosecution under s 55(1)(d) of the NCAT Act.

1. Since then, signed consent orders and notations, dated 9 March 2026, have been filed.
2. We are satisfied that both parties consent to the proposed orders and notation being made, and that it is within the power of the Appeal Panel to make them.
3. We will make the following order and notation by consent:

Order 3 of the orders made by the Appeal Panel on 21 January 2026 is amended by replacing "$19,547.60" with "$29,321.40".

Notation

1. The parties acknowledge that the sum of $29,321.40 has been paid by the appellant pursuant to Order 1 of the orders made on 17 March 2025, is held in the respondents' solicitor's trust account and is to be paid to the respondents forthwith.

1. The parties have filed submissions and supporting material concerning the costs of the appeal. They are:

(1) The owners' submissions filed 11 February 2025 seeking an order for costs in their favour (including indemnity costs from 17 July 2025) with supporting documentation including:

(a) a letter marked "without prejudice save as to costs" dated 17 July 2025 in which the owners offered to accept the sum of $44,321.40 from the builder (rather than the $48,869 ordered by the Tribunal) plus costs on the ordinary basis, in settlement of the proceedings (the Calderbank letter);

(b) a copy of procedural orders made by the Appeal Panel dated 2 May 2025 and 16 July 2025; and

(c) a statement from the owners' solicitor outlining alleged breaches of procedural orders made by the appellant in the course of the appeal.

(2) The appellant builder's (the builder) submissions on costs of the appeal, filed on 2 March 2026, opposing the owners' application for costs and seeking an order that each party pay their own costs of the appeal. Attached to the submissions were:

(a) procedural orders made by the Appeal Panel on 15 April 2025 and 11 July 2025;

(b) copy of the appellant's amended grounds of appeal;

(c) copy the respondent reply to those grounds; and

(d) copy email and letter showing that the respondent's solicitor served their submissions in the appeal on 18 September 2025, 11 days before the hearing.

1. The parties are at odds concerning what cost provisions apply in this case.
2. The provisions of s 60 of the NCAT Act provide that, save in special circumstances, each party is to bear their own costs. The section relevantly provides that:

60 Costs

(1) Each party to proceedings in the Tribunal is to pay the party's own costs.

(2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs.

(3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following -

(a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,

(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,

(c) 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,

(d) the nature and complexity of the proceedings,

(e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,

(f) whether a party has refused or failed to comply with the duty imposed by section 36(3),

(g) any other matter that the Tribunal considers relevant.

(4) If costs are to be awarded by the Tribunal, the Tribunal may -

(a) determine by whom and to what extent costs are to be paid, and

(b) order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis.

1. In contrast, rule 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) (the NCAT Rules) provides with respect to costs in internal appeals that:

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) enabling legislation, or

(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.

1. The first instance costs provisions which applied in this case are those found in r 38, which says:

38 Costs in Consumer and Commercial Division of the 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 an 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.

1. As was observed by Basten JA in Kaye v The Owners - Strata Plan No 4350 [2022] NSWSC 1386; 20 BPR 42767 at [81] (Kaye), it "may appear counterintuitive that a rule can override s 60 of the NCAT Act, which does not state that it is subject to any other provision or rule". However, as his Honour explained, s 60 is found in Pt 4 of the NCAT Act, which commences with s 35 that provides:

35 Application of Part

Each of the provisions of this Part is subject to enabling legislation and the procedural rules.

1. Further, s 4 contains the following provisions:

4 Definitions

...

(4) Any provisions of this Act that are expressed to be subject to the procedural rules have effect subject to any exceptions, limitations or other restrictions specified by the procedural rules.

(5) Subject to section 17(3), procedural rules that make provision as referred to in subsection (4) are not inconsistent with this Act.

Note -

Section 17(3) provides that the provisions of a Division Schedule for a Division of the Tribunal prevail to the extent of any inconsistency between those provisions and any other provisions of this Act or the provisions of the procedural rules. See also item 23 of Schedule 7. Also, the procedural rules cannot be inconsistent with enabling legislation. See sections 25(1) and 90(2)(a).

Accordingly, if rr 38 and 38A are engaged, they operate to the exclusion of s 60.

1. Rule 38A(2) requires that the costs provisions in r 38 be applied in appeal proceedings, when the procedural rules so requires. This is the case with appeals from Consumer and Commercial Division because r 38 contains a cost provision that applies in that Division of the Tribunal: see r 38(1). Rule 38(2)(b) then provides that s 60 does not apply where "the amount claimed or in dispute in the proceedings is more than $30,000". The proceedings for the purposes of r 38(2) are the appeal proceedings; not the original proceedings. In those circumstances, r 38(2) provides that, "the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award".
2. In Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 (Allen) an Appeal Panel considered the meaning of 'the amount claimed' and "the amount ... in dispute" in rule 38(2)(b) in appeal proceedings. The Appeal Panel said, at [57] -

Adapting these principles to the circumstances of the present appeals and having regard to the specific wording of r 38, it appears to us that in applying r 38(2)(b):

(1) The determinative factor is the amount in dispute in each appeal, not the amount in dispute in the proceedings at first instance;

(2) The phrase "in dispute" is to be construed as meaning truly in dispute or at issue or, inversely, not unrealistically in dispute;

(3) Whether "the amount ... in dispute" in each appeal is more than $30,000 depends on whether there is a realistic prospect that in each appeal the wealth of the appealing party would be changed by more than $30,000 or, put another way, whether the right claimed by the appealing party, but denied by the decision at first instance, prejudices that party to an amount in excess of $30,000;

(4) The fact that the value of the property the subject of any appeal exceeds $30,000 does not, of itself, mean that "the amount ... in dispute" in that appeal is greater than $30,000.

1. The view taken by the Appeal Panel in Allen is consistent with that taken by Basten AJ in Kaye and has been followed in numerous cases. In Taylormade Residential Pty Ltd v Hoare [2021] NSWCATAP 182 at [44] (upheld on appeal in Hoare v Taylormade Residential Pty Ltd [2022] NSWSC 1359) the Appeal Panel explained that:

Whether or not the $30,000 threshold in rule 38(2)(b) has been satisfied requires the Tribunal, in the light of the available evidence before it, to make an assessment of whether the amount truly in issue, or put another way, the true value of the work in issue, is more than $30,000.

1. In the present case the builder submits that the amount in dispute on appeal was $20,157.00. Since the appeal decision was made, the parties have agreed that the order we made should be amended to provide for a payment to the respondents of "$29,321.40", that is, less than the $30,000 threshold.
2. The owners' argument is that "the first instance costs provisions" must be applied, regardless of the amount actually in dispute on the appeal. In so submitting, the respondents rely on the costs decision of the Appeal Panel in The Owners - Strata Plan no 67608 v The Owners - Strata Plan no 67607; PINN 386 Pty Ltd v The Owners - Strata Plan no 67607; The Owners Strata Plan 67607 v The Owners - Strata Plan no 67608 and PINN 386 Pty Ltd [2026] NSWCATAP 30 (Citadel Complex) at [42]. This submission disregards the fact that no monetary amount was claimed in the Citadel Complex case.
3. There, at first instance, the Tribunal found that the value to the parties of the insurance liability in dispute exceeded $30,000 in value and made costs orders accordingly. On appeal, the same issues were in dispute. As a result, the Appeal Panel concluded that the rights to the same value were in issue. It therefore found, at [42], that r 38A was engaged. The Appeal Panel explained, at [41] that:

The debate in the submissions as to whether the appeals are concerned with amounts in excess of $30,000 is in our view irrelevant given the finding and determination ( referred to in paragraph 38 above) made by the Tribunal at first instance, the absence of an appeal from that decision and having regard to the provisions (referred to above) contained in rr 38 and 38A.

1. Further, the Appeal Panel went on to conclude that the appeal involved an amount over $30,000, as a matter of fact, explaining, at [43]:

... As the submissions of Strata Scheme 67607 state the dispute between the parties involved an adjustment of insurance premiums and the effect of the adjustments is to change the wealth of the respective parties, by an amount of more than $30,000. This approach is consistent with the decision of the Appeal Panel in Allen v Tricare. To the extent that our approach and that of Tricare is inconsistent with the decision in Malachite we are of the view that Tricare should be preferred as it is in conformity with the judgment in Kaye: see [79] of that judgment, where His Honour stated that what was "in dispute was not an amount of money, but involved a valuable property right which, as the evidence showed, was worth well in excess of $30,000.

1. It is apparent that the costs decision in Citadel Complex does not stand for the proposition advanced by the owners in their submissions. Rather, it is consistent with the decisions in Allan and Kaye.
2. Applying that understanding of the law, we are satisfied that this is a case in which rr 38 and 38A have no operation because the amount in dispute in the appeal was less than $30,000. This was always the case. As we noted in par [1] of the appeal decision: "[t]he appeal does not challenge the full amount ordered but seeks to reduce it to $28,712.00" from $48,869.00.
3. The case is therefore one to which s 60 of the NCAT Act applies. Special circumstances must be demonstrated before the Appeal Panel can make an order for costs.

Are there special circumstances warranting a costs order under s 60?

1. The owners rely on the following factors which they argue point to the existence of special circumstances meriting a costs order in accordance with s 60(3):

(1) the fact that the amount ultimately obtained by builder on appeal was less than that offered in the Calderbank letter of 17 July 2025 and that the builder's rejection of the offer was unreasonable;

(2) the builder's conduct of the appeal, which is said to have prolonged the proceedings and caused unnecessary disadvantage to the owners; and,

(3) that the appeal was lacking in substance.

1. The owners seek an order for costs on the ordinary basis up to the 17 July 2025, when the offer was made, and on an indemnity basis from then on.
2. The builder denies that there are special circumstances warranting a costs order being made, and says that each party should bear their own costs. The builder, by way of reply to complaints about its conduct, also points to a number of delays in compliance with the appeal timetable, made by the owners, which are said to have caused the builder disadvantage.

1. Because s 60 of the NCAT applies to the costs of the appeal, many of the parties submissions relating to Calderbank letter, which were made in the context that r 38A applied, are not relevant. As we apprehend the owners' submissions, they nonetheless maintain that the builder's refusal of the offer contained in the Calderbank letter was unreasonable, and ought to be taken into account as a relevant issue in determining costs in accordance with s 60(3)(g), "any other matter that the Tribunal considers relevant."
2. While we agree that the unreasonable rejection of a settlement offer may be taken into account under that sub-section, we do not think that the builder's rejection of the offer contained in the Calderbank letter was unreasonable. As the builder submits, that offer required the builder to agree to pay the owner's costs of the appeal, in circumstances where, given the amount in dispute on the appeal, costs would not be claimable, save in special circumstances. In those circumstances, we are not persuaded that the rejection of the offer was unreasonable.

Conduct prolonging the proceedings or causing disadvantage to the owners.

1. The owners' submissions contain a number of complaints about the builder's conduct of the proceedings, which they allege prolonged the proceedings and caused them disadvantage. This included issues such as the builder:

(1) amending the grounds of appeal to make the issues clearer, resulting in an amended reply being filed by the owners;

(2) filing submissions and the appeal bundle late, necessitating the allocation of a fresh hearing date; and

(3) raising "the relevant standards issue" for the first time at the appeal hearing, which resulted in arguments as to whether leave should be given to argue it and additional written submissions being required.

(1) the amended reply did not cause the owners disadvantage or delay the proceedings;

(2) the hearing date was extended to enable the owners to obtain additional evidence;

(3) the owners were themselves guilty of significant delay in filing late submissions in the appeal;

(4) "the relevant standards" issue was raised at the appeal hearing in response to the owners' submissions.

1. Apart from "the relevant standards" issue, we are not persuaded that any of matters complained of by the owners resulted in the proceedings being delayed or them being put at a disadvantage. We are not persuaded, on the material before us, that amending the appeal had those consequences, or that the postponed listing of the appeal was the result of such delay or caused the owners disadvantage.
2. This is not the case with respect to the builder's reliance on "the relevant standards" issue at the hearing. This was an issue that could have been but was not raised by the builder in its grounds of appeal. When the builder sought to raise it for the first time during the appeal, the owners objected. The builder responded to the effect that "the relevant standards" issue was one of interpretation, which was a relevant and pertinent question of law that it should be allowed to argue in the appeal. This resulted in us making directions for written submission relating to the issues to be filed after the hearing.
3. We ultimately refused the appellant owners leave to argue the relevant standards issue.
4. In our view, "the relevant standards" issue could and should have been raised as a ground of appeal when the appeal was filed and subsequently amended. By raising it for the first time at the appeal hearing, the builder prolonged the proceedings and put the owners to the disadvantage of having the make, file and serve additional submissions. These are factors the Appeal Panel may take into account in determining whether special circumstances exist under s 60(2)(a) and (b).

1. We see little point in setting out seriatim the various arguments advanced by the parties as to whether or not the appeal was lacking in substance. This is so because there were real issues requiring determination with respect the nature and extent of the Tribunal's power, on renewal, in the circumstances of this case, especially in the light of the confusion relating to what was said in the expert report from Mr Xue. We do not accept that the appeal lacked substance. It was not doomed to fail.

1. We conclude, having regard to the factors in ss 60(3)(a) and (b) of the NCAT Act, that there are special circumstances warranting an order for costs with respect to the legal costs of and incidental to "the relevant standards" issue in this appeal, being costs incurred after the hearing on 29 September 2025. It is appropriate to make such an order.
2. Otherwise, there are no relevant special circumstances and the usual rule that each party pay their own costs applies.

(1) The Appeal Panel dispenses with a hearing with respect to the issues determined in this decision.

(2) The appeal against the costs decision made on 5 May 2025 is dismissed pursuant to s 55(1)(a) of the Civil and Administrative Tribunal Act 2013 (NSW).

(3) Order 3 of the orders made by the Appeal Panel on 21 January 2026, is amended by replacing "$19,547.60" with "$29,321.40".

(a) 1. The parties acknowledge that the sum of $29,321.40 has been paid by the appellant pursuant to Order 1 of the orders made on 17 March 2025, is held in the respondents' solicitor's trust account and is to be paid to the respondents forthwith.

(4) The appellant shall pay the respondents' legal costs of and incidental to "the relevant standards" issue in this appeal, being costs incurred after the hearing on 29 September 2025, such costs to be agreed or assessed.

(5) Otherwise, the parties shall bear their own costs of the appeal.

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.