The Owners - Strata Plan 69743 v TRT Constructions Pty Ltd and John & Simon Constructions Pty Ltd

First Respondent's submissions 10The first respondent seeks two orders. Firstly, subject to order two, that the costs of the proceedings to date in the Tribunal be the first respondent's costs in the cause on a party/party basis. Secondly, that the applicant pays the costs of the first respondent thrown away by the transfer to the Supreme Court on an indemnity basis. 11In short, the first respondent's submissions can be summarised as follows: (1)The applicant has been in continuous default of orders of the Tribunal for an extravagantly long time. (2)Having proceedings against the first respondent dismissed early in 2013 and then reinstated by the District Court at the end of 2013, the applicant failed to comply with the orders of the District Court to "have its case in shape by February" 2014. (3)Even by 29 May 2014, the applicant's evidence was still deficient. (4)Having received an "indulgence from the District Court" the applicant has six-months later declared it is still not ready to proceed, which the situation is intolerable. (5)Having regard to the fact that "years have gone by and the applicant is still not ready to proceed" the orders the costs should be made even though such an order might be thought to be punitive.

Applicant's submissions 12The applicant accepts that the proceedings have had a long history. However the applicant does not accept that it has been in continuous default of the Tribunal's orders for an extravagantly long period of time. Rather, the applicant submits that there have been significant discussions between the parties trying to settle the proceedings and had earlier agreements been reached then a substantial portion of the dispute would have been resolved. 13The applicant says that on a number of occasions adjournments were made by consent so that the settlement process could proceed. The applicant relies on the decision of United Group Rail Services v Rail Corporation New South Wales [2009] NSWCA 177, where the Court considered alternative dispute resolution clauses and their enforceability, and submitted that this decision supports the view that "the parties and the Tribunal acted properly in their long endeavours to try and settle this claim (or at least part of it)". 14Therefore, the applicant says that it cannot be blamed for the delay in bringing these proceedings to a conclusion. 15The appellant then provides its overview of the history of directions, the strike out application (in which the applicant was successful) and the delays of nearly 15 months caused by the strike out application, appeal process to the District Court and the matter being remitted to be Tribunal. 16In relation to the recent expert report of Mr Todarello, the applicant says that the delay on this evidence was not of its making, including for the reason that its former expert Mr Dessaix had retired with no notice. Further, any omissions in connection with the expert report of Mr Todarello will be remedied by the time these proceedings are dealt with by the Supreme Court. 17The applicant refers to various authorities concerning defaults by experts in relation to the slow provision or default in providing expert evidence. In this regard the applicant identifies a failure of its own expert witness, Mr Dessaix in failing to produce a proper Scott Schedule earlier in the application (see submissions paragraph 23). 18In relation to the question of indemnity costs, the respondent says, referring to the decision of Justice Sheppard in Colgate- Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, that there must be misconduct, relevant delinquency, abuse of process, interior purpose and/or significant unreasonableness which causes an unfair delay and consequential costs before such an order is made. The applicant submits that the circumstances to justify such an order do not exist in the present case. 19In relation to the first respondent's proposed order that the costs of the proceedings to date be the first respondent's costs in the cause, the applicant "agrees" that there is no rational basis to order that the applicant suffer such an order which would be punitive and inappropriate in all the circumstances.

DECISION 20The applicant has had nearly 5 years to prepare its case and determine what claims it wishes to make against the first respondent. 21As is evident from the history recounted above, the claim has increased from $300,000.00 to approximately $800,000.00. Whether or not this increase in costs relates to more recent values being used for rectification costs, the discovery of additional defects, or some default by the applicant's expert improperly undertaking the process of preparing expert evidence as previously directed by the Tribunal cannot be determined on the evidence before the Tribunal at this time. 22However, what is clear is that an applicant in any proceeding is obliged to prosecute its case expeditiously. In this regard the applicant is, in ordinary circumstances, responsible for identifying the claims it wishes to make and preparing appropriate evidence to put forward those claims. More so is there a need for the applicant to give attention to the detail of its claim at an early stage where proceedings are brought in the Tribunal which has jurisdictional limits that must be considered as part of any determination the Tribunal might make. 23No reason is offered as to why the applicant could not have properly undertaken an investigation of all claims it wished to make either immediately prior to or close to the commencement of the present proceedings in 2009. If this had occurred, the proceedings in the Tribunal would have been transferred to a court of competent jurisdiction at a much earlier time, it being clear from the evidence now provided to the Tribunal that the applicant's claim is well in excess of the Tribunal's jurisdictional limit of $500,000.00. 24On the other hand, it is also clear from a review of the directions and orders made by the Tribunal that the proceedings have been adjourned by consent on a number of occasions throughout the years. It appears that the parties may have been attempting to resolve their differences through discussions as well as waiting for various rectification work to be undertaken. Again no evidence was adduced in relation to this aspect of the application and for present purposes it is unnecessary and unproductive to embark on such an enquiry. 25It should also be noted that little evidence has been filed by the first respondent in reply to the evidence previously filed by the applicant. The most significant evidence filed by the first respondent is an application to strike out the applicant's claim, which the application was ultimately unsuccessful following appeal to the District Court. 26In these circumstances, in my opinion, making an order that the costs of the proceedings to date be the first respondent's costs in the cause on a party/party basis (now known as the ordinary basis) would work and injustice to the applicant. 27This is because it seems improbable that all costs which have been expended to date can be said to have been incurred by reason of a default of the applicant. For example, costs incurred in trying to settle the dispute are not costs which should be awarded in favour of one party or another until the proceedings are concluded and a proper evaluation process undertaken. 28On the other hand, it seems to the Tribunal that in consequence of these proceedings being transferred to the Supreme Court of New South Wales that various costs will inevitably be wasted. For example there will be a need for the claims to be properly pleaded in accordance with the rules of the Court and there will be a need for evidence previously filed to be brought into conformance with the rules of evidence and/or placed in an appropriate court form. 29It does not appear that the evidence filed to date has been voluminous. To the contrary, the complaint made by the first respondent is that the evidence required has not in fact been filed on time and remains outstanding. Further, while it has been necessary for the applicant to engage in new expert by reason of the retirement of Mr Dessaix, the conduct of the applicant which has been identified in the present application (when considered in the context of the history of adjournments and the successful District Court Appeal) does not justify the making of a special order for costs. 30The award of costs is discretionary. An order for costs is to compensate the party who has been successful or who is not in default and has incurred unnecessary costs. It is not to punish the responsible party. 31The applicant is responsible for the choice of venue and in this case the Tribunal is not the appropriate forum because of the monetary limit applicable to Home Building claims. If the applicant had properly identified its claim before or shortly after the application was lodged, these proceedings would have continued in an appropriate forum. The proceedings may still have been delayed but there would not be costs wasted because of the very late change of venue. 32In the present case, the Tribunal is satisfied that the proper exercise of discretion requires that an order should be made that the applicant pay to the first respondent the first respondent's costs thrown away by reason of the transfer of these proceedings to the Supreme Court of New South Wales, such costs to be paid on an ordinary basis. However an assessment of costs should await the conclusion of the proceedings at which time the wasted costs can properly be identified. 33Finally, the applicant should pay the costs of this application. 34Accordingly, the Tribunal makes the following orders: (1)The applicant is to pay to the first respondent the costs of the first respondent thrown away by reason of the transfer of these proceedings to the Supreme Court of New South Wales, such costs to be paid on an ordinary basis. (2)The assessment of the costs pursuant to order 1 is to await the finalisation of these proceedings in the Supreme Court of New South Wales. (3)The applicant is to pay the costs of the application for costs as agreed or assessed on an ordinary basis. M Harrowell Principal Member Civil and Administrative Tribunal of New South Wales 11 July 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: 04 September 2014