Symes v Mick Fabar Constructions Pty Ltd

The Question of Leave

1. The application for leave to appeal is made pursuant to s 83 of the Civil and Administrative Tribunal Act 2013 ("the CAT Act"). Leave is required from this Court to appeal on a question of law. Section 83 provides: "83 Appeals against appealable decisions (1) A party to an external or internal appeal may, with the leave of the Supreme Court, appeal on a question of law to the Court against any decision made by the Tribunal in the proceedings. (2) A person on whom a civil penalty has been imposed by the Tribunal in proceedings in exercise of its enforcement or general jurisdiction may appeal to the appropriate appeal court for the appeal on a question of law against any decision made by the Tribunal in the proceedings. (3) The court hearing the appeal may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) the following: (a) an order affirming, varying or setting aside the decision of the Tribunal, (b) an order remitting the case to be heard and decided again by the Tribunal (either with or without the hearing of further evidence) in accordance with the directions of the court. (4) Without limiting subsection (3), the appropriate appeal court for an appeal against a civil penalty may substitute its own decision for the decision of the Tribunal that is under appeal. (5) Subject to any interlocutory order made by the court hearing the appeal, an appeal under this section does not affect the operation of the appealable decision of the Tribunal under appeal or prevent the taking of action to implement the decision."
2. The question of leave is dependent upon a number of factors. Ordinarily, an applicant for leave must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at: Carolan v AMF Bowling Pty Limited [1995] NSWCA 69; Zelden v Sewell; Henamast Pty Ltd v Sewell [2011] NSWCA 56. Questions of finality are important, as are questions of proportionality, the latter of particular prominence here, where an issue as to costs before a Tribunal, proceedings before which are intended in part to restrain the costs of legal proceedings, could come to swamp the amount disputed in the original claim.
3. As a general statement, it is appropriate to grant leave to appeal only where issues of principle or questions of general public importance are involved, or where there appears to be an injustice which is reasonably clear: Jaycar Pty Ltd v Lombardo [2011] NSWCA 284; Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164.
4. Broadly, the plaintiffs seeks to argue matters relevant to the construction of s 60(5) of the CAT Act, and r 38 of the Civil and Administrative Tribunal Rules 2013 ("the CAT Rules"); and the application by the Appeal Panel of s 60 of the CAT Act. The defendant concedes that these considerations raise questions of law, although it opposes leave being granted.
5. Section 60 provides as follows: "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. (5) In this section: costs includes: (a) the costs of, or incidental to, proceedings in the Tribunal, and (b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal."
6. Rule 38 of the CAT Rules is in these terms: "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."
7. The plaintiffs argue that this Court should grant leave to appeal because of what is asserted to be a degree of inconsistency in the approach of NCAT and the Appeal Panel to the interpretation and application of s 60 of the CAT Act, particularly bearing in mind the operation of r 38, and the wider significance of this issue to all appellants to the Appeal Panel.
8. The defendant submits that at its highest, the plaintiffs raise matters that are arguable, but without establishing any reasonably clear injustice, or any important issue of principle.
9. Because merit is relevant to the determination of the question of leave, this matter will be considered further when considering the proposed grounds of appeal.

The Proposed Appeal

1. If granted leave, the plaintiffs seek to advance three grounds of appeal expressed as follows:

Ground 1: Does s 60 of the CAT Act properly construed require "special circumstances" to be demonstrated relevant to costs on appeal

1. Ground 1 concerns the correct construction of s 60 of the Act.
2. The plaintiffs submit that the proper construction of s 60(5) of the CAT Act and r 38 of the CAT Rules demands that costs should follow the event.
3. Following the establishment of NCAT on 1 January 2014 the outstanding proceedings in this matter were allocated to the Consumer and Commercial Division of the Tribunal in accordance with s 7 and clause 13(2)(a) of Schedule 1 of the CAT Act.
4. Rule 38 of the CAT Rules permitted the Tribunal to make a costs order in the absence of special circumstances where the amount in dispute exceeded $30,000, and such an order was in fact made at first instance in this matter in the plaintiffs' favour.
5. The plaintiffs contend that, in a matter on appeal from the Consumer & Commercial Division, where the disputed amount exceeds $30,000, the true effect of s.60(5) and r 38 is that the Appeals Panel has power to make an award for costs even without special circumstances being demonstrated.

Ground 2: Was the Appeal Panel in error in not following Sahyoun v Owners Corporation Strata Plan 75123 (No 2) NSWCATAP 70?

1. Ground 2 concerns whether costs provisions at first instance are relevant, either alone, or together with other circumstances, to the determination of special circumstances. The applicant submits that the authorities in the Tribunal relating to this ground are inconsistent.
2. In Sahyoun the Appeal Panel held that the combination of three factors - the availability of costs at first instance, the quantum of money involved, and the weakness of the appeal - constituted special circumstances permitting an order for costs on appeal. The plaintiffs argued that the Appeal Panel should have followed the same line of reasoning to award costs in their favour in the instant matter.

Ground 3: Did the Appeal Panel err in its application of s 60(3) of the CAT Act?

1. Ground 3 concerns the ambit of special circumstances under s 60(2) and (3) of the Act and whether the Tribunal took too restrictive an approach in this case.
2. This final ground asserts that the Appeal Panel erred in its application of s 60(3), in that it overlooked a number of matters which constituted, or together constituted, special circumstances. The plaintiffs contend that the weakness and complexity of the appeal, the commercial nature of the proceedings, and the transitional nature of the proceedings warranted a finding of special circumstances.

Consideration

1. The proposed grounds of appeal require the Court to consider, broadly, three questions concerning the interpretation and application of the costs provisions by the Appeal Panel.
2. The first question is whether s 60 properly interpreted requires special circumstances to be demonstrated before an order for costs can be made or whether, as the plaintiffs contends, costs may be awarded as following the event. The plaintiffs rely upon s 60(5) of the Act read in the light of s 16(4) of the Act.
3. Section 60(5) is set out above. Section 16 relevantly provides: "16 Divisions of Tribunal (1) On the establishment of the Tribunal, there are to be the following Divisions of the Tribunal: (a) the Administrative and Equal Opportunity Division, (b) the Consumer and Commercial Division, (c) the Occupational Division, (d) the Guardianship Division. (e) (Repealed) (2) The functions of the Tribunal in relation to enabling legislation that are allocated to a Division of the Tribunal are to be exercised in that Division. (3) […] (4) However, the functions of the Tribunal when constituted by an Appeal Panel or in exercise of its enforcement jurisdiction are not allocated to any particular Division of the Tribunal. (5) […] (6) […]."
4. The plaintiffs submit that, when s 60(5) and s 16(4) are read together, the intent of the legislation is that the costs of an appeal to the Appeal Panel should be treated in the same way as is the question of costs at first instance.
5. In construing the meaning and effect of a statute or statutory provision, the task of the courts is to ascertain the objective intention of the legislature and give effect to that intention. That purposive task is undertaken by determining the meaning of the language used, in accordance with principles of construction fixed by common law or statute: Wilson v Anderson [2002] HCA 29; (2002) 213 CLR 401 at [8]. Determining the meaning of the words used in the context in which they appear is fundamental to the exercise.
6. An underlying principle of statutory construction is that ambiguity or uncertainty should not be read into a statutory provision by the courts; where the language employed by the legislature is clear it should be given its ordinary meaning: Maunsell v Olins [1975] AC 373 at p.394. Although individual words in the English language can often be used to convey many shades of meaning, statutes are not drafted as a demonstration of the beauty and richness of the language, and so it is the natural and ordinary meaning of the words used which is to be given primacy.
7. Adopting that approach to the interpretation of the provisions cited by the plaintiffs I am unable to agree that the proper meaning of the legislation is as contended for by them. The neutrality of the Appeal Panel is clearly provided for by s 16(4); the panel is intended to function as other than and separate to any specific Division of the Tribunal, and that is so regardless of the terms of s 60(5).
8. That appears to have been the consistent approach of the Appeal Panel. In Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120, the Appeal Panel considered whether the familiar rule that costs follow the event applied to appeal proceedings before it. It determined that the rule had no application at [3] to [8]: "3. The general costs rule is that each party is to pay their own costs: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 60. Costs may only be awarded if the Tribunal "is satisfied that there are special circumstances warranting an award of costs": NCAT Act, s 60(2). Subsection 60(3) specifies the matters to which the Tribunal may have regard when considering whether or not special circumstances exist. 4. The respondent has submitted that rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) applies to the appeal proceedings and that that provision "gives the Tribunal an unfettered discretion to award costs where the amount in issue is greater than $30,000" or that "the usual rule in civil litigation (applies) that 'costs follow the event'". 5. Rule 38 (1) says: (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 6. Contrary to the respondent's submission, this rule does not apply to proceedings before the Appeal Panel when exercising its powers in connection with costs of an appeal. As was pointed out by the respondent in paragraph 9 of its submissions, s 16 (4) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) provides: However, the functions of the Tribunal when constituted by an Appeal Panel or in exercise of its enforcement jurisdiction are not allocated to any particular Division of the Tribunal. 7. The Appeal Panel has power under s 80(2) of the NCAT Act in determining an appeal to exercise all functions that are conferred or imposed by the NCAT Act or other legislation on the Tribunal at first instance when varying or making a decision in substitution for the decision under appeal. But an order in relation to costs of the appeal is not a function of the Tribunal at first instance. Rather, it is a decision of the Appeal Panel in the appeal proceedings. The exercise of the power to make an order in respect of the costs of an appeal is not a "function of the Tribunal… allocated to the Consumer and Commercial Division of the Tribunal" and Rule 38(1) does not apply. 8. Consequently, the respondent is required to demonstrate there are special circumstances within the meaning of section 60 of the NCAT Act.
9. The plaintiffs frankly concede that there is no authority from either NCAT or this Court that contradicts or challenges the correctness of the conclusion of the Appeal Panel in Megerditchian.
10. On my reading of the legislation, the plain meaning of the words supports the approach taken by the Appeal Panel and its interpretation of the Act. In the absence of some more compelling argument for error than is here advanced, or of some true demonstration of confusion or inconsistency in its application, I am unable to conclude that the plaintiffs have suffered a reasonably clear injustice, or that there is an issue of more general public importance to be determined. I would not grant leave to consider ground 1.
11. The second issue is the plainitff's contention that in refusing to order costs in their favour, the Appeal Panel erroneously failed to follow the decision in Sahyoun v Owners Corporation Strata Plan 75123 (No 2) NSWCATAP 70.
12. In Sahyoun, whilst affirming the correctness of the approach discussed in Megerditchian, the Appeal Panel made an award for costs, having found that special circumstances applied. The plaintiffs submit that the Appeal Panel should have found that the same considerations arose in the present matter, and awarded costs.
13. Whilst comity is always a very important consideration, I do not conclude that an Appeal Panel of NCAT is bound to follow a decision of the Panel in another, earlier, decision. That being the case, it cannot be an error of law that the Panel as constituted in this matter did not make the same orders as made in a separate matter by another Panel differently constituted.
14. That contention depends, in any event, upon a conclusion that the circumstances of the present matter are in all material respects identical to the circumstances that applied in Sahyoun, militating in favour of consistency of approach by the Appeal Panel. That is a conclusion that is not open to this Court having regard to the evidence relied upon in support of the application for leave. Significantly, there is no evidence before me as to the quantum of costs in the proceedings before the Appeal Panel.
15. I do not understand the decision in Sahyoun to suggest that the availability of costs at first instance is of itself a feature that dictates the availability of costs in proceedings before the Appeal Panel. In that decision of the Panel it was the combination of the availability of costs at first instance, the quantum of money involved, and the weakness of the appeal that militated in favour of the grant of costs.
16. In the present matter, whilst costs were available at first instance, there is no evidence before this Court as to quantum, and nor can it be concluded that the appeal was as weak as the plaintiffs suggest (certainly the Appeal Panel did not so conclude). Having regard to those considerations, I would not grant leave to argue this ground.
17. The final issue is the question of whether the Appeal Panel erred in its application of s 60. The plaintiffs assert that the Panel was wrong in concluding that special circumstances had not been made out.
18. Relevantly, the Appeal Panel stated: 13. However the respondents do not suggest any of the matters referred to in subparagraphs s60(3)(a) to (g) of the Act apply. Rather, they seem to base their claim for costs on the length of time that the parties had been involved in the ligation; evidentiary matters arising at the hearing; and the abandonment of certain claims at the hearing. These matters are relied upon in support of the submission that the appeal is either out of the ordinary or is otherwise weak. 14. We are unable to find any merit in the respondents' claim for costs. Since none of the statutory considerations are addressed or relied upon, we see no basis for an award or costs. It is not submitted, for example, that the appeal was so weak that it should fail; nor is it suggested that the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance. 15. We conclude that the appeal lodged by the appellant was one in which the appellant considered that it had reasonable prospects of success. It follws that in the absence of any of the statutory considerations being relied upon, and in the absence of any circumstances which we consider to be out of the ordinary, we find no basis to award costs as claimed. Accordingly the Appeal Panel orders: (1) That the claim for costs made by the respondents to the appeal be dismissed (2) That there be no order as to the costs of the application
19. Whilst the plaintiffs contend that the Panel took a narrow and restrictive approach to the application of s.60(3), that conclusion does not clearly follow from the decision. The Panel made express reference to s 60(3)(g) and to considerations which might be regarded as out of the ordinary. Whilst minds might reasonably differ on this aspect of the matter I am not able to conclude that the Panel was in error, that its decision was not open to it, or that it was unjust. Accordingly, I would not grant leave to advance this ground.

Conclusion

1. Having considered the merits of the proposed appeal, and the principles which apply to the grant of leave, I am not persuaded that there is a sound basis for leave to be granted. I propose to refuse leave.

orders 1. Leave to appeal is refused. 2. Each party is to bear their own costs unless an application is made to the Court within 14 days for costs, in which case the application will be determined on the papers.

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