The Owners - Strata Plan No. 76929 v Baldwin

Scope and nature of internal appeals

1. Internal appeals may be made as of right on a question of law, and otherwise with leave of the Appeal Panel: s 80(2) NCAT Act.
2. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. Whether there has been a failure to provide proper reasons; 2. Whether the Tribunal identified the wrong issue or asked the wrong question; 3. Whether a wrong principle of law had been applied; 4. Whether there was a failure to afford procedural fairness; 5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. Whether the Tribunal took into account an irrelevant consideration; 7. Whether there was no evidence to support a finding of fact; and 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it.
3. Those eight headings accord with what was said by the High Court in House v The King [1936] HCA 40. In Hannaford v Commonwealth Bank of Australia [2014] NSWCA 297 at [14] Tobias AJA summarised what was said in House v The King and held that an attack on a discretionary decision must fail unless it can be demonstrated that the decision maker: (a) made an error of legal principle, (b) made a material error of fact, (c) took into account some irrelevant matter, (d) failed to take into account, or gave insufficient weight to, some relevant matter, or (e) arrived at a result so unreasonable or unjust as to suggest that one of the foregoing categories of error had occurred, even though the error in question did not explicitly appear on the face of the reasoning.

Submissions

1. In deciding the appeal, we have had regard to the following: 1. The Notice of Appeal lodged on 20 September 2021; 2. The Reply to Appeal lodged on 08 October 2021; 3. The appellant's written submissions lodged on 03 November 2021; 4. The respondent's written submissions lodged on 03 December 2021; 5. The appellant's submissions in reply lodged on 08 December 2021; 6. The submissions on costs at first instance, referred to earlier; 7. The procedural directions made at call-over; and 8. The Tribunal's reasons for decision in respect of the costs application.

Notice of Appeal

1. The Notice of Appeal was lodged on 20 September 2021, which is within the 28-day time period specified in cl 25(4) of the Civil and Administrative Tribunal Rules 2014 (the Rules).

Grounds of Appeal

1. The Notice of Appeal contains four grounds: Ground 1 1. At paragraph [43] of the decision on the application for costs dated 20 August 2021 (the "Decision"), the Tribunal erred in law in finding that the Respondent's refusal or failure to comply with the procedural orders of the Tribunal did not constitute a failure or refusal to comply with the duty imposed by section 36(3) of the Civil and Administrative Tribunal Act 2013 (the "CAT Act"). … Ground 2 9. The Tribunal erred in law in paragraph [44] by finding that the following items were not relevant to the application for costs: A. the outcome of the interim proceedings, and B. the Respondent's failure to comply with the orders of 11 May 2021. … Ground 3 17. The Tribunal erred in law at paragraph 47 in finding that there were no special circumstances for the reasons set out above. This incorrect finding led to the Tribunal's decision to dismiss the costs application. … Ground 4 20. The Tribunal erred in law by failing to make a decision on the question of costs of the interim application, which were reserved. …
2. The orders sought on the appeal are as follows: 1. Orders setting aside order 2 2. Order for costs on a ordinary basis as agreed or assessed in favour of the Applicant OR IN THE ALTERNATIVE Order for costs on the ordinary basis as agreed or assessed in favour of the Appellant's (sic) with respect to costs or an incidental to the Respondent's refusal or failure to comply with the duty imposed by section 36(3) of the Civil and Administrative Tribunal Act 2013. 3. Order for costs on an ordinary basis as agreed or assessed in favour of the Appellant with respect to the costs of and incidental to this appeal. 4. Any other order the Tribunal deems fit.

Appellant's submissions

1. Ground 1 was based on what was said at [43] in the reasons at first instance on costs: I am not satisfied that the applicant refused or failed to comply with the duty imposed by s 36(3) of the NCAT Act. The failure of the applicant to comply with order 3 of the 8 January 2021 orders, and order 1 of the 22 March 2021 orders within the specified time does not of itself establish such a failure. Further, the applicant was under no obligation to amend the substantive application pursuant to order 2 of the 8 January 2021 orders.
2. The appellant contended that both s 36(3) and s 60(3)(f) were clear and unambiguous, that there was no dispute the respondent had failed to comply with directions on more than one occasion, that the respondent had conceded a failure to comply, and that what was said in that paragraph suggested there was a threshold which was contrary to the words of those statutory provisions and was not supported by any authority in the decision.
3. Ground 2 was based on what was said at [44] in the reasons at first instance on costs: I am satisfied that the outcome of the interim proceedings, and the failure to comply with order 2 of the 11 May 2021 orders within the specified time is irrelevant to the costs of the costs of the substantive proceedings. I am satisfied that the commencement of fresh proceedings by the applicant against the respondent involving the same issues is an irrelevant consideration in determining the costs of the substantive proceedings.
4. On this ground, the appellant submitted that, as the decision as to the costs of the application for interim orders was reserved, that was a relevant matter. The appellant further submitted that there was a failure to comply with the orders made on 11 May 2021 since the respondent's submissions on costs, which were due on 7 June 2021, were not filed until 25 June 2021. Reference was made to s 60(5) in support of the proposition that the application for costs was incidental to the proceedings.
5. Ground 3 was based on the first sentence in [47] of the reasons at first instance on costs: If I had been satisfied that there are special circumstances warranting an award of costs in favour of the respondent, then I would have exercised the discretion to award costs in favour of the respondent.
6. The appellant's case is that, if the Tribunal agrees that there were special circumstances, an order for costs in favour of the appellant should be made.
7. Ground 4 was withdrawn.

Respondent's submissions

1. The respondent's submissions did not deal with the grounds of appeal separately, but relied on what was said at first instance at [39]: I am not satisfied that the applicant has conducted the substantive proceedings in a way that unnecessarily disadvantaged the respondent. The failure of the applicant to comply with order 3 of the 8 January 2021 orders did not cause disadvantage to the respondent. On the contrary, it meant that the respondent did not have to adduce evidence in order to meet the evidence of the applicant.
2. Reference was also made to what was said at [40-44] in relation to paragraphs (c) to (g) of s 60(3) and to following findings, recorded at [45-46]: I am not satisfied that the withdrawal of the substantive application by the 7 May 2021 5.54pm email without any explanation is a special circumstance warranting an award of costs in favour of the respondent. … Having regard to all the circumstances, I am not satisfied there are special circumstances warranting an award of costs in favour of the respondent within s 60(2) of the NCAT Act.
3. On the question of whether to award costs when proceedings are withdrawn, the respondent's written submissions of the respondent referred to the Appeal Panel decisions in Pozo v Willtip Pty Ltd [2021] NSWCATAP 381 (Pozo) which noted what was said in Pines Resort Management Pty Ltd v Marsh [2019] NSWCATAP 12 (Pines).

Submissions in reply

1. The appellant contended that the circumstances were different in Pozo as the withdrawal in that case was supported by medical evidence, and since no submissions as to a breach of s36(3) were made in that case.

Consideration

1. It is convenient to first note that, under the heading "Relevant new evidence", the appellant referred to the second application for substantive orders.
2. The existence of the second application for substantive orders was not new as it was referred to in the appellant's first instance submissions in reply. The appellant also sought to rely on what was said to have occurred in the third application after the date of the decision the subject of this appeal. We do not consider the second application for substantive orders to be relevant to this appeal for two reasons. First, any conduct relevant to costs will be a matter for consideration in that application. Secondly, what may have occurred after 20 August 2021 cannot provide support for there being an error of law in the orders made and reasons published on that date.
3. It is important to note that the primary question in this appeal is whether there was an error of law in the exercise of discretion in relation to costs and not to duplicate the exercise of that discretion.

Ground 1

1. This ground relates to the application for substantive orders. In the reasons challenged in this appeal, there appears a detailed account of the relevant events from when the first and second applications were commenced until the first was dismissed and the second was withdrawn. The issues raised by the appellant relate to two aspects: the non-compliance with the Tribunal's directions and the withdrawal of the substantive application.
2. The fact that the Tribunal granted leave to amend by order 2 made on 8 January 2021 did not create an obligation to amend. There was non-compliance with order 3 made on that occasion since the respondent failed to file and serve the evidence upon which he relied by 05 February 2021. On 22 January 2021 a notice of hearing indicated that a hearing date of 11 May 2021 had been allocated.
3. The appellant's response to that failure was to elevate the respondent's non-compliance with order 3 to a strike-out application. On 22 March 2021 the Tribunal ordered written submissions on the strike-out application to be filed by 25 March 2021 and the respondent's filing of submissions one day late was a de minimis breach.
4. On 23 April 2021 the strike-out application was deferred to the 11 May 2021 hearing date. On 06 May 2021 the appellant filed its documents for that hearing but a request was made the following day to withdraw the application for substantive orders. Which resulted in that application being dismissed on 10 May 2021.
5. We agree with the Tribunal below that a failure and even more than one failure to comply with directions of the Tribunal does not have the necessary consequence that there has been a breach of s 36(3) which thereby satisfies s 60(3)(f). That aspect of the appellant's case does not amount to an error of law.
6. As to the withdrawal of the proceedings, Pozo was a case where medical evidence was the primary reason while Pines was a case where a breach of s 36(3) was not argued. The reasons under challenge did consider the withdrawal of the proceedings and found that the application for substantive orders was unlike the position in Rodny v Stricke [2020] NSWCATAP 20 where there had been lengthy preparation and significant costs incurred.
7. From the history of the application for substantive orders, the appellant had no need to prepare a case in response as the respondent did not present any case in support of the application by the 30 April 2021 due date. The only preparation required of the respondent for the intended hearing on 11 May 2021 was in relation to its decision to pursue a strike-out application.
8. As is clear from the reasons under consideration at [45], in support of its application for costs the appellant provided neither evidence of lengthy preparation nor evidence of the amount of costs incurred.
9. In those circumstances, none of the established reasons for this Tribunal to interfere with the exercise of the discretion as to costs has been demonstrated.

Ground 2

1. This ground relates to the application for interim orders. It is to be noted that, after this application was filed on 20 November 2020, the initial orders made on 24 November 2020 expressly indicated that the first application was considered "an application for an urgent hearing, rather than as an application for orders on an interim basis".
2. Accordingly, the first application involved little in the way of costs additional to those occasioned by the second application. On 24 November 2020 the costs of that application were reserved. The 24 May 2021 submissions of the appellant on the question of costs were only headed with the reference number of the second application and do not appear to clearly indicate that an order for the costs of the application for interim orders was also sought. That may explain why the reasons challenged in this appeal only refer to the outcome of that application.
3. Even if it be assumed that there was an error of law in that there was no consideration of whether to award costs in respect of the application for interim orders, we are satisfied that, even if the discretion to award costs in respect of that application were to now be considered, there are no special circumstances by reason of: 1. The short duration of that application; 2. The early identification of the application as only raising an additional question of whether the application for substantive orders warranted an urgent hearing date at the initial directions hearing in respect of that application; and 3. The absence of any suggestion of non-compliance in relation to that application.

Ground 3

1. This ground was advanced on the basis that we should make an order for costs if satisfied that there are special circumstances. This ground is expressed in terms of the discretion being exercised again, rather than identifying any error of law. As we are not satisfied there was an error of law in relation to the finding that there were no special circumstances, the basis for this ground has not been established.

Ground 4

1. As indicated earlier, this ground was not pursued.

Costs

1. On 6 October 2021 orders were made in this appeal granting leave for both parties to be legally represented on the condition that they do not seek an order for costs of the appeal. As a result, each party should be ordered to pay their own costs of the appeal.

Conclusion

1. For the reasons set out above, we make the following orders: 1. Appeal dismissed. 2. The parties are to pay their own 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: 24 December 2021