Wassef v Panagiotopoulos

NCAT Appeal Panel|2019-07-26

Introduction

On 26 April 2019, we refused leave to appeal an interlocutory decision made in the Consumer and Commercial Division of the Tribunal on 21 December 2018. The Tribunal's decision was to allow the respondent to re-open his case and tender new evidence. The parties were given an opportunity to put on written submissions in respect of costs of the appeal. Both parties applied for costs.
Following the appeal hearing, the appellant applied for a summons to produce documents to be issued to the respondent's solicitor, Mr Sheehy. We have separately dismissed that application, on the basis that the appellant applied for the summons to be issued after we had published reasons for decision on the appeal. In any event, the material sought went to issues concerning the subject matter of the respondent's application for leave to re-open the proceedings before the Tribunal: that is, Mr Sheehy's contact with Mr Jean Haddad, whose affidavit the respondent wished to tender in the proceedings before the Tribunal. It was not relevant to the costs of the appeal.
For the reasons set out below, we have decided to dispense with a hearing on costs and to order the appellant to pay the respondent's costs of the appeal.

Background

The background to the appeal is set out in our reasons for refusing leave to appeal: Wassef v Panagiotopoulos [2019] NSWCATAP 101.

Submissions and evidence

In deciding costs, we have had regard to the written submissions of the parties and the material that was before us on the substantive appeal.
The appellant was legally represented at the hearing of the appeal and remains represented in the Tribunal proceedings below. However, his solicitors, Adams & Partners, withdrew from the appeal proceedings on 7 May 2019. The appellant apparently prepared submissions on costs himself.

Issues

The issues to be determined on the costs applications are: 1. Should a hearing be dispensed with? 2. What provisions apply to the costs applications? 3. What legal principles apply to the costs applications? 4. Should a costs order should be made and if so, on what basis?

Should a hearing be dispensed with?

Section 50 of the NCAT Act relevantly provides: 50 When hearings are required (1) A hearing is required for proceedings in the Tribunal except: … (c) if the Tribunal makes an order under this section dispensing with a hearing, or … (2) The Tribunal may make an order dispensing with a hearing if it is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Tribunal. (3) The Tribunal may not make an order dispensing with a hearing unless the Tribunal has first: (a) afforded the parties an opportunity to make submissions about the proposed order, and (b) taken any such submissions into account. (4) The Tribunal may determine proceedings in which a hearing is not required based on the written submissions or any other documents or material that have been lodged with or provided to the Tribunal in accordance with the requirements of this Act, enabling legislation and the procedural rules. …
The parties agreed that costs could be determined on the papers. Further, we are satisfied that the issue of costs can be adequately determined by considering the parties' written submissions. The parties would be put to unnecessary expense if required to argue the costs application at a hearing. The order referred to in s 50(1)(c) and (2) of the NCAT Act has accordingly been made.

What provisions apply to the costs application?

The general rule in relation to costs in the Tribunal is that unless special circumstances are established, the parties pay their own costs: s 60(1) of the NCAT Act.
However, r 38 of the Civil and Administrative Tribunal Rules 2014 (the Rules) modifies the application of s 60 in proceedings before the Consumer and Commercial Division of the Tribunal and r 38A modifies the position in respect of appeals.
Rule 38 provides: 38 Costs in Consumer and Commercial Division of the Tribunal (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.
Rule 38A provides: 38A Costs in internal appeals (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.
Different views have been in relation to whether when r 38 is relevant to costs of an appeal because of the operation of r 38A, the word "proceedings" should be read a reference to the proceedings in the Tribunal below or to the appeal proceedings.
In Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 (Allen v TricCare) the Appeal Panel considered that the orders sought on appeal determined this issue. The Appeal Panel found at [43]: In the case of an internal appeal, the "amount claimed … in the proceedings" can be determined by considering what orders the appellant seeks on the appeal. If those orders sought include an order that the respondent pay a sum of more than $30,000, expressly or impliedly, then the Tribunal should conclude that the amount claimed in those proceedings was more than $30,000. If the substantive orders sought do not involve any express or implied claim to any amount, it is difficult to see how there is any "amount claimed" for the purposes of r 38(2)(b).
This reasoning would presumably also when what is at stake in an internal appeal can be characterised not as an amount claimed in the proceedings but as an "amount …. in dispute".
The Appeal Panel's conclusion in Allen v Tricare can be contrasted with the reasoning set out in Singh v Fobupu Pty Ltd [2018] NSWCATAP 127 (Singh v Fobupu). The appeal in that matter was against an interlocutory decision regarding the making of procedural directions. The amount claimed in the Tribunal proceedings was more than $30,000. The appellant was refused leave to appeal and the respondent made an application for costs. In submissions on costs, the appellant argued that r 38 was not engaged because the application to the Appeal Panel was an application to seek leave to appeal an interlocutory decision and r 38 does not operate in connection with interlocutory decisions or appeals from such decisions.
The Appeal Panel found: 23. In my opinion, this submission has no substance. The terms of r 38 are clear. That is, "the Tribunal may award costs in proceedings (emphasis added) in which this rule applies even in the absence of special circumstances warranting such an award for costs if … the amount claimed or in dispute in the proceedings (emphasis added) is more than $30,000". 24. There is no dichotomy between those parts of the proceedings which relate to interlocutory applications and orders which might be made during the course of the proceedings and those parts of the proceedings that might finally dispose of a party's rights. If the Legislature had intended that the power to award costs in the proceedings was limited to those circumstances where final orders are made, it would have said so. There is no logical reason to limit the power given to the Tribunal under r 38 in the manner suggested by the applicant. 25. Further, there is no question that, despite section 60, the rules may make provision for matters of "practice and procedure" which are different to those in the NCAT Act. In this regard s 35 of the NCAT Act provides: Each of the provisions of this Part is subject to enabling legislation and the procedural rules. 26. Section 60 is part of Part 4 Practice and Procedure of the NCAT Act to which s 35 applies. Consequently, r 38(2) applies despite s 60 if the amount claimed or in issue is more than $30,000: see Bonita at [41] and following. 27. In my view, there is no question that the amount claimed or in dispute in the proceedings at first instance is more than $30,000. This is made clear from the applicant's submissions in the present application for costs, some of which have been set out above. Even though the amounts claimed in the original application are described as "TBA", which I understand to mean "to be advised", there can be no doubt that the amount in dispute in the proceedings is more than $30,000 whether or not an express claim has been made in the original application. In this regard the comments of the Appeal Panel in Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [48] and following are relevant, namely that the wealth of the parties could change by more than $30,000. 28. It follows from s 38A that because the "first instance costs provisions … differed from those set out in s 60 of the NCAT Act … the Appeal Panel for an internal appeal … must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal"
The apparent tension between these two decisions in respect of their interpretation of r 38A was referred to in Singh v Khan [2019 NSWCATAP 45 (Singh v Khan), which also concerned an appeal against an interlocutory decision. In that matter, the Appeal Panel noted at [13] that it would be "an unusual case where an interlocutory order the subject of an interlocutory appeal could be shown to be likely to affect the wealth of the appealing party by more than $30,000".
The Appeal Panel in Singh v Khan found it unnecessary to resolve the question whether rule 38(2)(b) was applicable or to reconcile the decision of the Appeal Panel in Singh v Fobupu with paragraph [57] of the decision in Allen v Tricare because it was satisfied that there were special circumstances warranting an award of costs within the meaning of s 60(2) of the NCAT Act.
In this case, the issue on the appeal was whether the Tribunal erred in exercising its discretion to allow the respondent to re-open his evidence. The dispute was therefore not directly about an amount of money. However, the parties agreed that the new evidence the respondent wanted the Tribunal to consider concerned an issue with an economic value of approximately $12,000 to $17,000. This is therefore a case in which an interlocutory order does have an indirect monetary value. However, it is not one of those "unusual cases" referred to in Singh v Khan where an interlocutory order the subject of an appeal is likely to affect the wealth of the appealing party by more than $30,000.
The respondent submits that the word "proceedings" in r 38 should be read as a reference to the proceedings in the Tribunal below and not to the appeal proceedings. The respondent submits that this interpretation would harmonize the costs provisions in any appeal with the costs provisions in the proceedings below, while the contrary interpretation would create an artificial bifurcation, where the proceedings below are subject to one costs policy whereas a dissatisfied litigant could bring multiple applications for leave to appeal on different interlocutory rulings, and thus avoid the relevant costs provisions.
We are of the view that there is force in the respondent's submission, particularly in circumstances where the decision under appeal is an interlocutory decision. In this regard, we also agree with the observations of the Appeal Panel in Singh v Khan that it would be unusual for an interlocutory order the subject of an appeal to affect the wealth of the appealing party by more than $30,000.
We conclude that at least where the decision that is the subject of the appeal is an interlocutory decision, the reasoning in Singh v Fobupu concerning which costs provision applies is to be preferred.
However, in the event that we are wrong in this conclusion, we have considered whether special circumstances warrant an order for costs.

What legal principles apply to the costs awarded on the basis of special circumstances?

Section 60(3) of the NCAT Act states that 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.
The inclusion of "any other matter that the Tribunal considers relevant" in the list of factors set out in s 60(3) demonstrates that that list is not an exclusive list.
The term "special circumstances" is not defined in the NCAT Act. It has been interpreted to mean circumstances that are out of the ordinary but not necessarily extraordinary or exceptional. The discretion to award costs must be exercised judicially having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11].
In Alexander James Pty Ltd v Pozetu Pty Ltd (No. 2) [2016] NSWCATAP 75 at [14] the Appeal Panel stated: 14. An assessment whether circumstances are "special" involves the exercise of a value judgement carried out by way of comparison between what is not "special", and what is special. There are no scientific means by which the former can be ascertained. The evaluative process is necessarily one of impression informed by the particular provisions of section 60, which by sec 60(3)(f) incorporates also a consideration of section 36(3) of the Act.

Should a costs order be made and if so, on what basis?

As noted above, both parties applied for costs.

The appellant's application

The basis on which the appellant seeks costs is somewhat difficult to discern, as his submissions are confusing and include material that is not relevant to the issue of costs of the appeal. As far as we understand, the appellant believes that he should be awarded costs of the appeal because the orders made by the Tribunal did not limit the scope of the respondent's ability to re-open his case and the appeal decision made it clear that the re-opening of the respondent's case was limited.
In relation to this, in our reasons for decision we stated: 44. Fourth, while the orders made by the Tribunal allowing the application to re-open did not limit the scope of the new evidence that the respondent could provide, on the basis of the submissions made by the respondent at the appeal hearing, we accept that the respondent does not propose to put on further expert evidence. In the event that the respondent attempts to broaden the scope of the evidence to include issues beyond those raised in Mr Haddad's affidavit, that can be the subject of submissions at the hearing below.
This was an issue that was discussed in the appeal hearing, but it did not result in an order being made in the appellant's favour. On the contrary, it was one of the reasons why leave to appeal was refused. In such circumstances, we are not satisfied that the appellant was the successful party in the appeal proceedings, or that there are any special circumstances which would warrant an order for costs in the appellant's favour.
The appellant's application for costs of the appeal is refused.

The respondent's application

We are satisfied that the following factors, when considered together, constitute special circumstances that warrant an order for costs in favour of the respondent.
First, the Tribunal's decision was an interlocutory decision concerning practice and procedure for which leave to appeal was required. We consider that the appellant's chances of success on the application for leave to appeal were always very weak.
Second, the underlying amount in dispute was very low. As noted above, it was not in dispute that the new evidence the respondent sought to rely on in his application to re-open would (if accepted) make a difference of about $12,000 to $17,000 to any award of damages. The fact that the appeal concerned a relatively small sum in the context of the proceedings as a whole and in the context of the legal costs likely to be incurred in prosecuting and defending the appeal also constitutes special circumstances.
The respondent has not sought a special costs order and we are not satisfied that there is any reason to award costs other on the ordinary basis.

Orders 1. A hearing on costs is dispensed with in accordance with s 50(2) of the Civil and Administrative Tribunal Act 2013. 2. The appellant's application for costs is refused. 3. The appellant is to pay the respondent's costs of and incidental to the appeal on the ordinary basis, as agreed or assessed.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar 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: 26 July 2019

At a glance

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Judgment (12 paragraphs)

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Cases Cited (6)

Cited By (2)