Tang v Mawad Group Pty Ltd

NCAT Appeal Panel|2021-11-09

Introduction

On 20 September 2021, following a hearing on 10 May 2021, the Appeal Panel made orders and published its Reasons For Decision in Tang v Mawad Group Pty Ltd [2021] NSWCATAP 282. The orders made on that day included an order that if either party wished to make submissions as to costs, then written submissions were to be provided to the Appeal Panel in accordance with a timetable set out in those orders. The parties were also directed to indicate whether they consented to the Appeal Panel making an order dispensing with a hearing of the issues concerning the costs.
The Appeal Panel subsequently received written submissions from the respondent ("builder") dated 1 October 2021 in support of its application for an order that the appellant ("owners") pay the builder's costs of the appeal incurred since 16 March 2021.
The builder consented to the Appeal Panel making an order dispensing with a hearing of the issues concerning the costs of the appeal. The owners, as noted above, have not provide any submissions and have not otherwise indicated whether they consent to such a course. The Appeal Panel is satisfied, for the purposes of s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) ("NCAT Act"), that the builder's application can be adequately determined in the absence of the parties, by reference to written submissions and other materials already before the Appeal Panel.

Relevant law

The builder's application for costs of the appeal incurred since 16 March 2021 is made pursuant to s 60 of the NCAT Act. That section provides in so far as is presently relevant: 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. …
Section 60 provides that the prima facie position is that each party to proceedings in the Tribunal (including proceedings in the Appeal Panel) is to pay their own costs and that costs may be awarded only where there are special circumstances warranting an award of costs. In considering whether there are special circumstances, the Tribunal may have regard to the matters set out in s 60(3).
Special circumstances are circumstances that are out of the ordinary, but need not be those which are exceptional or extraordinary: Edwards v Commissioner for Fair Trading, Department of Customer Service (Costs) [2019] NSWCATAP 249 at [9]; Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]; Commissioner for Fair Trading v Edward Lees Imports Pty Ltd (No 2) [2019] NSWCATAP 222 at [8]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [32].
If satisfied that there are special circumstances, the Appeal Panel must further be satisfied that they are circumstances "warranting an award of costs": Fitzpatrick Investments Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 103. The exercise of the discretion requires the Appeal Panel "to weigh whether those circumstances are sufficient to amount to 'special' circumstances that justify departing from the general rule that each party bear their own costs": BPU v New South Wales Trustee and Guardian (Costs) [2016] NSWCATAP 87 at [9].

Submissions

The builder's submissions may be summarised as follows: 1. it relies upon s 60(3)(c), (e) and (g); 2. s 60(3)(c) and (e) are engaged because the owners' appeal was a weak claim and one lacking in substance and in particular: 1. the submissions made by the owners were rejected; 2. the builder was wholly successful; 3. the builder should not bear its costs in those circumstances; and 1. s 60(3)(g) is engaged because of the correspondence passing between the parties and in particular the failure of the owners to accept the 13 January 2021 Offer, which the builder contends was unreasonable in all the circumstances.

Are there special circumstances?

As noted above, special circumstances are circumstances that are out of the ordinary, but need not be exceptional or extraordinary, and in considering whether there are such circumstances, the Appeal Panel may have regard to the matters set out in s 60(3) of the NCAT Act.
The builder submitted that the owners' appeal raised weak arguments. However, those arguments were not so untenable that on their own, they provide special circumstances.
However, the making of the 13 January 2021 Offer and the 18 March 2021 Offer and the owners' non-acceptance of both of those offers are circumstances out of the ordinary. Thus, the Appeal Panel is satisfied that there are special circumstances.

Exercise of discretion

Thus, the discretion in s 60 of the NCAT Act is enlivened.
The appropriate exercise of that discretion is to refuse the builder's application for costs incurred after 16 March 2021, for the following reasons.
First, the application is limited to costs of the appeal incurred after 16 March 2021. As noted above, the builder already has the benefit of 16 March 2021 Costs Order which entitles it to the costs of the appeal up to and including 16 March 2021.
Secondly, on 23 March 2021, the owners filed their Amended Notice of Appeal, which was limited in the manner described in the orders made by the Appeal Panel on 16 March 2021. The Amended Notice of Appeal was considerably more focused than the Notice of Appeal the subject of the 13 January 2021 Offer.
Thirdly, each of the offers were made prior to the service of the Amended Notice of Appeal on 23 March 2021 (albeit that the 18 March 2021 Offer remained open until 26 March 2021) and neither of those Offers addressed the Amended Notice of Appeal.
Fourthly, whilst it is true that if the owners had accepted the 13 January 2021 Offer, no further costs would have been incurred, it does not follow that the builder should be awarded costs beyond 16 March 2021. As noted above, the builder has the benefit of the 16 March 2021 Costs Order and the shape of the appeal changed when the Amended Notice of Appeal was filed on 23 March 2021.
Fifthly, whilst the 18 March 2021 Offer was open after the Amended Notice of Appeal was filed and until 26 March 2021, the owners' non-acceptance of that offer was not unreasonable in circumstances where part of that offer required payment of costs of $20,000 against an asserted amount of costs incurred of $24,712.50 in satisfaction of the 16 March 2021 Costs Order, in circumstances where a previous estimate of the builder's costs incurred had been discounted by the Tribunal by approximately 50 per cent - in making the 18 November 2020 Costs Order, the Tribunal discounted the amount claimed by the owners from $46,108.83 plus GST to $23,529.
Finally, as noted above, whilst the owners' appeal raised weak arguments those arguments were not untenable. The arguments raised were not so weak as to justify an award of costs.

Orders

The orders of the Appeal Panel are: 1. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW), dispense with a hearing on the question of costs. 2. The builder's application for costs of the appeal since 16 March 2021 is dismissed.

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: 09 November 2021

At a glance

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Judgment (8 paragraphs)

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Legislation Cited (1)

Cases Cited (10)