Tak Roofing Pty Ltd v Mickelson

NCAT Appeal Panel|2023-07-28

Summary

On 28 April 2023, after a hearing on the merits, the Tribunal ordered the appellant, a supplier of kit sheds, to pay the respondent home owner the sum of $32,039 as a refund of the price paid for a shed which was not delivered. The Tribunal made further machinery orders in respect of the kit for the shed, which had been prepared but not delivered, and in respect of some component windows, which had been delivered but remained the appellant's property.
The appellant lodged an appeal, within time. The appeal challenged the appellant's liability for the judgment sum in its entirety.
The matter came before me for directions and to hear an application for a stay. I gave directions and dismissed the application for a stay, for reasons I gave orally.
The appellant was directed to lodge and serve its material in support of the appeal by 21 June 2023 but did not do so. It then sought to withdraw the appeal. The respondent consented but sought costs.
I made directions with a timetable for the filing of evidence and submissions in respect of costs, noting that the Appeal Panel may dispense with a hearing and deal with the issue on the papers. The parties were directed to address that issue in their submissions, should they wish to.
Both parties have made submissions. Neither opposed a hearing being dispensed with. The respondent seeks costs of the appeal fixed in the sum of $11,803. As I am satisfied that the issues for determination can be adequately determined in the absence of the parties by considering the written submissions and other material lodged with the Tribunal, I will make an order dispensing with a hearing: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 50(2).
For the reasons set out below, I have decided to order that the appellant pay the respondent's costs of the appeal on the ordinary basis.

Principles relating to costs of the appeal

The primary provision governing costs in relation to proceedings in the Tribunal is s 60 of the NCAT Act. Pursuant to that section, each party to proceedings is generally to pay their own costs in appeals of this nature. However, that general rule may be displaced in respect of decisions of the Consumer and Commercial Division, and appeals from such decisions, by rr 38 & 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) (the Rules). In that regard, where the amount claimed or in dispute in the proceedings at first instance is more than $30,000, the general rule in those proceedings is modified by r 38(2)(b). If that remains the case in respect of the appeal, then r 38A is engaged and the Appeal Panel may award costs even absent a finding of special circumstances: Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25. That was the case here.
As a result, the usual considerations as to costs, unconstrained by s 60 of the NCAT Act, are applicable.
Each application for costs must be determined on its own merits and the central and overriding principle in any order as to costs is that of doing justice between the parties in each particular case: Moseley v AB (No 2) [2017] NSWSC 1812 at [65] - [66]. Costs usually follow the event, but where proceedings have been brought to an end without a decision on the merits, there is no relevant event by which to gauge that outcome.
In Re The Minister for Immigration & Ethnic Affairs of the Commonwealth of Australia; ex parte Lai Qin [1997] HCA 6, a decision of McHugh J, his Honour said: In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule, the successful party is entitled to his or her costs. Success in the action or on issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or not it will make a costs order. In an appropriate case, a court will make an order for costs, even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the cost of the litigated action which by settlement or extra curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action.
Later in the judgment, his Honour said: If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings.
The principles in Lai Quin have been adopted as being apposite to decisions in the Appeal Panel.
However, one circumstance which may justify consideration of an order for costs is where a party, in effect, capitulates or surrenders to the other. In those circumstances, where the rules as to costs are not constrained by the terms of s 60 of the NCAT Act, the usual order is that the capitulating party pays the costs.
Capitulation can take different forms. Depending on the circumstances, withdrawing proceedings may be a form of capitulation: Khanna v Bond Realty Pty Ltd [2019] NSWCA 128; Kiama Council v Grant [2006] NSWLEC 96 at [80].

Respondent's submissions

With respect, the respondent's submissions do not really engage with the proper basis for making an order as to costs of the appeal. Rather, they largely make assertions as to the appellant's conduct of the proceedings at first instance and the effect of that conduct on the respondent. The respondent does, however, submit that the lodgment of the appeal, with no strong grounds, constitutes the appellant unreasonably prolonging the proceedings and that r 38 of the rules, at least, is engaged.
Curiously, a submission is also made that, if the appellant does not now comply with the orders made at first instance, then orders should be made that they can be enforced against the appellant's General Manager and Director. As submitted by the appellant, though, no jurisdiction or power to make such an order has been identified. The respondent also seeks interest pursuant to r 39 of the Rules.

Appellant's submissions

The appellant sought an itemisation of the costs claimed by the respondent, but none was forthcoming. Notwithstanding that, it accepts that the respondent should be reimbursed for the reasonable costs of the appeal. To the extent the respondent's submissions may be read as suggesting that an order should also be made for the respondent's costs at first instance, which is not clear, the appellant notes that here is no apparent power or warrant for such an order to be made.

Consideration

I accept that the appellant's withdrawal of the appeal, unexplained in any other fashion, represents a capitulation in respect of the appeal and that the respondent should have an order for costs of the appeal.
Rule 39 of the Rules operates independently to ensure that interest accrues on the unsatisfied order at first instance and requires no order by me.
Nor am I satisfied I have any power to amend the orders and somehow include individuals involved with the appellant to become, in effect, substitute judgment debtors if the appellant defaults.
There is insufficient evidence before me to be satisfied that I can appropriately fix a lump sum costs order, on the principles outlined in STAR Training Academy Pty Ltd v Commissioner of Police (No 2) [2022] NSWCATAP 98 at [49] - [50], particularly in the face to of a challenge to the reasonableness of the amount claimed.
The respondent should have his costs to be agreed, or if not agreed then as assessed, on the ordinary basis.

Orders

To give that effect to that decision, my orders are as follows: 1. A hearing of the application in respect of costs is dispensed with. 2. The Appellant is to pay the Respondent's 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. 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: 28 July 2023

At a glance

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Judgment (6 paragraphs)

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Legislation Cited (2)

Cases Cited (6)