Taylor v Clientel Developments Pty Ltd

NCAT Appeal Panel|2020-11-18

REASONS FOR DECISION

On 17 July 2020 we delivered our decision in these proceedings. The substance of our decision was that the appellant had some success in the appeal proceedings. (See Taylor v Clientel Development Pty Ltd [2020] NSWCATAP 136).
The appeal proceedings concerned two sets of proceedings in the Consumer and Commercial Division of the Tribunal as referred to at [1] and [2] of the Principal judgement. In the proceedings brought by the appellant, HB 18/46172, she was unsuccessful both in relation to her claim and the costs order against her in those proceedings. In her appeal, the appellant was unsuccessful in overturning those orders.
In HB 18/52740 the present respondent was successful in obtaining an order in the sum of $12,034.80 and an award of costs in its favour. In her appeal, the appellant was successful in having this decision and the costs order relating to it set aside.
In compliance with orders made by the Appeal Panel the parties have filed submissions on costs.
The respondent consents to the issue of costs being determined on the papers and without a hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 ('CAT Act'). The appellant does not oppose such a course being taken. We are satisfied that the question of costs can be adequately determined on the basis of the written submissions. Accordingly, pursuant to s 50 (2) of the CAT Act, we have decided to dispense with the hearing on the question of costs and to determine the question on the papers.
The appellant has applied for an order that the respondent pay her costs of the appeal: 1. On the usual basis up to 23 March 2020 and thereafter on the indemnity basis; and 2. In the alternative on the usual basis.
In the further alternative, the appellant submits that there be no order for costs.
In connection with her application for indemnity costs, the appellant relies on a "Calderbank' 'Without Prejudice Save as to Costs' letter dated 23 March 2020 sent to the respondent's solicitor.

Costs jurisdiction

The appellant submits that Rule 38 of the Civil and Administrative Tribunal Rules 2014 applies. She also submits that there are special circumstances which would entitle her to a costs order under s 60 of the CAT Act.
The respondent's submissions do not address this issue, but seem to suggest that s 60 of the CAT Act applies.
Rule 38A of the Civil and Administrative Tribunal Rules provides with respect to internal appeals that: (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.
Rule 38 is a first instance costs provision which applies to claims in the Consumer and Commercial Division where, among other things, the amount in dispute exceeds $30,000. Rule 38 states: (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.
The Tribunal at first instance in its costs decision of 13 February 2013 at [19] treated both sets of proceedings as being the 'proceedings' for the purposes of Rule 38 because both matters were heard together and evidence in one set of proceedings was considered as evidence in both. Based on that finding the costs application was determined pursuant to Rule 38. There was no appeal against that finding.
As a result and for the purposes of Rule 38A the first instance costs provisions differed from those set out in s 60 of the CAT Act. We must therefore apply Rule 38 in deciding this costs application. There is no requirement for us to find special circumstances in order to make a costs order.
In applying the first instance costs provisions, Rule 38(2)(b), when deciding whether to award costs in relation to the internal appeal, we must proceed on the basis that the phrase 'the amount claimed or in dispute in the proceedings is more than $30,000' relates to the amount claimed or in dispute in the appeal: Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [43] and [57(1)].
In the Amended Notice of Appeal the orders sought by the appellant were listed as, among other things, setting aside the Tribunal's orders made on 9 January and 13 February 2020. The orders sought do not refer to a specific amount that would enable us to determine whether or not the amount claimed or in dispute in the appeal proceedings was more than $30,000.00.
This difficulty is addressed in Allen v TriCare (Hastings) Ltd at [57(3)] as follows: 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;
Having regard to all grounds of appeal we find that the amount in dispute in the appeal exceeds $30,000.00 because the orders sought by the appellant in connection with the proceedings brought by her at first instance concerned her claim for $33,766.12 and orders for relief of payment to the respondent of $18,418.75.

Who was the successful party?

The appellant was unsuccessful in her appeal against the orders made at first instance in HB 18/46172. She was successful in her appeal against the orders made in HB 18/52740. Overall she may be described as the successful party on the basis that her appeal secured her success on at least two of her grounds of appeal in the appeal proceedings.
The starting point in the exercise of our discretion concerning costs is that a successful party should be entitled to an order for costs in their favour: Thompson v Chapman [2016] NSWCATAP 6 at [69].

Indemnity costs

The appellant's application for indemnity costs is based on a letter dated 23 March 2020 her solicitors sent to the respondent's solicitors after the appeal proceedings were instituted and the Amended Notice of Appeal was filed. The offer contained in the letter was: 1. The respondent agree to do all things reasonably necessary to set aside the orders made by the Tribunal on 9 January and 13 February 2020 in proceedings HB 18/52740 and HB 18/4617; 2. The respondent agree not to enforce any orders made in relation to proceedings HB 18/52740 and HB 18/4617 or AP 20/06016; 3. The appellant agree to withdraw the appeal filed in AP 20/06016 with no order as to costs; 4. The sum of $12,000 currently held in the respondent's solicitors trust account be remitted to the appellant within 3 days of acceptance of the offer; 5. The parties agree to bear their own costs of the proceedings HB 18/52740 and HB 18/46172 and AP 20/0616; 6. The parties irrevocably and immediately release each other from all claims arising out of or in relation to proceedings HB 18/52740 and HB 18/46172 and AP 20/0616; 7. The acceptance of the offer to be immediately binding but, the parties agree that it would be more for fully recorded in a deed of settlement and release.
In Miwa Pty Ltd v Siantan Properties Pte Ltd (No. 2) [2011] NSWCA 344 Basten JA identified two questions which are relevant to a 'Calderbank' offer and a claim for indemnity costs. They are whether: 1. there was a genuine offer of compromise, and 2. it was unreasonable for the offeree not to accept it.
We have no doubt that the appellant's solicitor's letter dated 23 March 2020 was a genuine attempt to settle the appeal proceedings.
For the purposes of considering the appellant's offer it is instructive to consider the following passage from SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323, approved in Jones v Bradley(No. 2) [2003] NSWCA 258. Giles JA stated at para 37: The making of an offer of compromise in the form of a Calderbank Letter … where the offeree does not accept the offer but ends up worse off than if the offer had been accepted, is a matter to which the court may have regard when deciding whether to otherwise order, but it does not automatically bring a different order as to costs. All the circumstances must be considered, and while the policy informing the regard had to a Calderbank letter is promotion of settlement of disputes an offeree can reasonably fail to accept an offer without suffering in costs. In the end the question is whether the offeree's failure to accept the offer, in all the circumstances, warrants departure from the ordinary rule as to costs, and that the offeree ends up worse off than if the offer had been accepted does not of itself warrant departure.
It is common ground that the respondent did not accept the offer. The first question to be determined is whether the respondent ended up worse than if it had accepted the offer. If that is found, the next issue is whether the respondent acted unreasonably in not accepting the offer.
We have referred to the result of the appeal above. The fact is that the appellant was unsuccessful in obtaining orders setting aside one of the first instance decisions and the adverse costs order made in relation to those proceedings. As a result the respondent did not end up worse off than if the offer had been accepted. If it had accepted the offer, it would have agreed to setting aside the orders it obtained HB 18/46172, an outcome not achieved in the appeal.
Because the respondent did not end up worse off than if the offer had been accepted, there is no basis for an indemnity costs order in favour of the appellant.

Should the appellant obtain a costs order on the usual basis?

The respondent's submissions refer us to the Court of Appeal decision in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 in connection with the situation which arises where there are multiple issues in a case. The relevant extract from Bostik Australia Pty Ltd v Liddiard is at [38] where the Court stated: 38 The principles governing the making of an order as to costs so as to reflect the time taken in dealing with a particular issue in which the successful party in the proceedings or on the appeal did not succeed were reviewed by this Court in Elite Protective Personnel Pty Ltd & Anor v Salmon (No 2) [2007] NSWCA 373. Those principles may be summarised as follows: • Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported). • In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. A similar approach is adopted on appeal. • If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue: Sydney City Council v Geftlick & Ors (No 2) [2006] NSWCA 374 at [27]. • Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: State of New South Wales v Stanley [2007] NSWCA 330 at [18] per Hislop J (with whom Beazley and Tobias JJA agreed). • A separable issue can relate to "any disputed question of fact or law" before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34]. • Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation: James v Surf Road Nominees Pty Ltd (No 2), citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd [1993] FCA 259; (1993) 26 IPR 261 at 272.
Having regard to the above principles, we are of the view that the appellant's prospects on Ground 7 of the Appeal were strong. If successful on Ground 7, the inevitable result was that she would have, at the least, partial success on Ground 8 of the Appeal.
The appellant failed on Grounds 1, 2, 3, 4, 5, 6 and partially on ground 8. We are of the view that the appellant's prospects of success on these grounds were not strong.
The time taken at the appeal hearing to address Ground 7 was not significant. It is our view that Ground 7 was clearly separable from all other Grounds of the Appeal, except Ground 8 which was consequential on the appellant achieving success on her preceding grounds. We are also of the view that the Grounds of Appeal upon which the appellant failed took up a significant part of the appeal hearing making it appropriate to deprive the appellant of a substantial portion of her costs.
It is our view that that the appellant should be awarded costs to compensate her for her success in the appeal on Grounds 7 and 8. However as those Grounds did not take up a significant amount of time at the Appeal hearing, we are of the view that she should only recover 20% of her costs of the appeal, such costs if not agreed to be assessed on the basis set out in Division 3 of Part 7 of the Legal Profession Uniform Law Application Act 2014.

Orders 1. A hearing in respect of the question of costs of the appeal is dispensed with pursuant to section 50(2) of the Civil and Administrative Tribunal Act 2013. 2. Clientel Developments Pty Ltd must pay Bianca Taylor 20% of her costs of the appeal, such costs if not agreed to be assessed on the basis set out in Division 3 of Part 7 of the Legal Profession Uniform Law Application Act 2014.

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: 18 November 2020

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