Wickham v Tiffney

Overview

1. The appellant homeowner has appealed from a costs decision of the Tribunal, in the Consumer and Commercial Division. The homeowner, Sandra Wickham, had commenced proceedings against the builder, Craig Tiffney, on 23 December 2013 (file no HB 13/66643). In her initial claim, the homeowner sought an order for an amount of $200,000 for building rectification work and "up to $100,000 for inconvenience factor" (the defective building works claim) together with an order that she was not required to pay the builder an invoiced amount of $18,400 (the overcharging claim).
2. On 31 March 2014, the homeowner filed and served an Amended Points of Claim which included a claim for damages in respect of an alleged false and misleading representation pursuant to section 236 of the Australian Consumer Law.
3. On 8 April 2014, the builder also lodged a claim seeking payment of two invoices plus interest (i.e. $54,541.84) which he alleged were payable by the homeowner under the contract for residential building work they had entered in 2011 (file no HB 14/19213). The invoiced amounts were $18,296.64 and $33,488.67.
4. On 25 November 2014, the homeowner sought and obtained an order for costs in an interlocutory application to set aside a summons.
5. On 31 March 2015, seven days before the substantive hearing of both applications, the homeowner's solicitor wrote to the builder's solicitor to advise that the homeowner would not be pressing her Australian Consumer Law claim.
6. Both applications were heard on 7 and 8 April 2015. At the commencement of the hearing, the builder advised he was not pressing his claim in regard to the $33,488.67 invoiced amount.
7. The Tribunal determined both applications on 3 July 2015 and published written reasons for decision the same day. The Tribunal found that: 1. the homeowner was entitled to a payment of $150,715.56 ($147,233.95 in regard to the defective building works claim and $3,481.61 in regard to the overcharging claim); and 2. the builder was entitled to a payment of $22,928.26 ($18,296.64 plus $4,631.62).
8. On the basis of these findings the Tribunal made an order that the builder pay the homeowner the sum of $127,787.30 within 30 days. The Tribunal also made orders for the filing and serving of written submissions on costs and that a decision on costs would be made, on the papers, unless a party sought a hearing on costs.
9. The homeowner and the builder filed written submissions on costs. On 3 September 2015, the Tribunal published its decision and reasons for decision in respect to costs. The Tribunal's decision was in the following terms: "1. The Tribunal notes that the costs order made on 25 November 2014 by Senior Member Paul in these proceedings remains in full force and effect. 2. No further or additional order is made as to costs."
10. The homeowner has appealed the decision in order 2 above and seeks an order that the decision be set aside and in substitution thereof an order that the builder pay her legal costs and disbursements in respect of her claim (HB 13/66643) and that of the builder (HB 14/19213) as agreed or assessed, or such other orders as the Appeal Panel sees fit.
11. The homeowner's grounds of appeal are: "1. The cost order 2 … constituted an error of law because a) The Tribunal member failed to reasonably apply established legal principles with respect to the determination of the issue of costs; b) Tribunal Member's discretion with respect to the proposed cost orders was not exercised judicially and/or reasonably; c) The Tribunal member determined the issue of costs on a superficial and arbitrary basis, instead of on a reasonable view of the facts and the evidence; and on the merits; d) The appellant was denied natural justice. 2. The Appellant has suffered a substantial miscarriage of justice because a) the order declining to make a cost order in the Appellant's favour was not fair and equitable; b) the decision was against the evidence."
12. The builder, in his Reply to Appeal, supported order 2 made by the Tribunal below. The builder also contended, in the alternative, that the Appeal Panel had no jurisdiction to hear and determine the appeal in so far as it related to the homeowner's claim (HB 13/66643), because that claim was brought prior to the establishment of this Tribunal.
13. For the reasons that follow, we find the Appeal Panel does have jurisdiction to hear and determine the appellant's appeal in so far as it relates to the homeowner's claim. We have also found that the Tribunal made an error of legal principle in the exercise of its discretion to award costs and hence its discretion miscarried. Accordingly, we have determined that the appeal should be allowed and order 2 of the Tribunal should be set aside and the matter be remitted for reconsideration.

Appeal Panel's jurisdiction

1. Subsection 80(2)(b) of Civil and Administrative Tribunal Act 2013 (NCAT Act) provides that an "internal appeal" may be made as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds.
2. The words "internal appeal" are defined in subsection 32(5) of the NCAT Act to mean "an appeal to the Tribunal against an internally appealable decision."
3. The words "internally appealable decision" are defined in subsection 32(4) of the NCAT Act to mean "a decision of the Tribunal or a registrar over which the Tribunal has internal appeal jurisdiction." Subsection 32(1)(a) of the NCAT Act provides the Tribunal has internal appeal jurisdiction over any decision made by the Tribunal in proceedings for a "general decision" or a "administrative review decision". A "general decision" of the Tribunal is a decision of the Tribunal determining a matter over which it has general jurisdiction (NCAT Act, subsection 29(3)).
4. Subsection 29(1) of the NCAT Act provides that the Tribunal has "general jurisdiction" over a matter if, relevantly, legislation (other than the NCAT Act or the procedural rules) enables the Tribunal to make decisions or exercise other functions of a kind specified by the legislation in respect of that matter. Subsection 29(2) provides that the Tribunal also has jurisdiction to make "ancillary and interlocutory decisions" in proceedings for the exercise of its "general jurisdiction." The order for costs was not an interlocutory order, as it finally determined the rights of the parties in relation to the question of costs: see Antonio v Ian Cubitt's Classic Home Improvements Pty Ltd [2016] NSWCATAP 37 at [109]. A decision "concerning the awarding of costs in proceedings" is an "ancillary decision": see NCAT Act section 4 and Antonio v Ian Cubitt's Classic Home Improvements at [57].
5. There is no dispute that the decision of the Tribunal in so far as it relates to the builder's claim (HB 14/19213) falls within the Tribunal's "general jurisdiction": see Home Building Act 1989, sections 48K and 48L.
6. While the homeowner's claim was commenced in the Consumer, Trader and Tenancy Tribunal (CTTT) and prior to the establishment of this Tribunal, by reason of the transitional provisions in schedule 1 of the NCAT Act, the Tribunal was given jurisdiction over matters which were "part heard proceedings" as at the date of the abolition of the CTTT and the establishment of this Tribunal (i.e. 1 January 2014): see NCAT Act, schedule 1, clause 6(1) and 7. However, in determining such applications "the provisions of any act, statutory rule or other law that would have applied to or in respect of those proceedings … continue to apply": see NCAT Act, schedule 1, cl 7(3)(b); NSW Land and Housing Corporation v Diab [2014] NSWCATAP 8 at [16]ff and Antonio v Ian Cubitt's Classic Home Improvements Pty Ltd at [40].
7. That is, the Tribunal was given jurisdiction to hear and determine proceedings commenced in the CTTT that were part heard as at the end of December 2013. In NSW Land and Housing Corporation v Diab at [31] to [34], the Appeal Panel held that determinations made by this Tribunal in regard to these part heard proceedings were "internally appealable decisions" under section 32 of the NCAT Act and not section 67 of the repealed Consumer, Trader and Tenancy Tribunal Act: see also Antonio v Ian Cubitt's Classic Home Improvements Pty Ltd at [47] and [48]. Accordingly, the Appeal Panel has jurisdiction to hear and determine the homeowner's appeal in regard to the Tribunal's order in so far as it relates to her claim and that of the builder.
8. As noted above, subsection 80(2) of the NCAT Act provides that a party may appeal from an ancillary decision such as a costs decision as of right on any question of law, or with leave of the Appeal Panel, on any other grounds. Where leave is sought from a decision of the Consumer and Commercial Division of the Tribunal, the Appeal Panel's power to grant leave is set out in clause 12 of schedule 4 of the NCAT Act. That clause relevantly provides as follows: "12 Limitations on internal appeals against Division decisions (1) An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with)."
9. The homeowner relied upon clause 12(1)(a) and (b).

The decision of the Tribunal below

1. In its reasons for decision, the Tribunal initially dealt with its power to make an order for costs. In regard to the homeowner's claim, the Tribunal said the relevant provision was that set out in section 53 of the Consumer Trader and Tenancy Tribunal Act 2001 and clause 20 of the Consumer Trader and Tenancy Tribunal Regulation 2009. In regard to the builder's claim the Tribunal said the relevant provision was that set out in section 60 of the NCAT Act and clause 38 of the Civil and Administrative Tribunal Rules 2014 (NCAT Rules).
2. The Tribunal then set out the basis on which the homeowner had made her claim for costs, followed by the basis on which the builder made his claim for costs.
3. The Tribunal noted the homeowner submitted that the "normal rule that ""costs follow the event"" should be applied (see at [7]). The Tribunal also referred to the decisions relied on by the homeowner in support of her contention, which included the High Court decisions in Latoudis v Casey (1990) 170 CLR 534 and Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72. The Tribunal noted the homeowner submitted that as she had been successful in about 73% of her defect work claim, she was entitled to an order for costs in her claim. The Tribunal also noted, the homeowner had submitted that as she had successfully defended the builder's claim, he was not entitled to the costs of his claim. However, she went on to submit she was entitled to her costs in respect of that part of the builder's claim which the builder abandoned at the commencement of the hearing. The Tribunal summarised the homeowner's claim, at [13], as follows: "13 Hence, the owner's submission was that she was entitled to an order for costs on a party/party basis in both applications in addition to the costs order made by Senior Member Paull."
4. At [15] to [18] of its reasons for decision, the Tribunal referred to the submissions of the builder in regard to costs. The Tribunal noted the builder's contention that he had been successful in his claim, whereas two days before the hearing the homeowner did not press her claim alleging a false and misleading representation. The Tribunal also noted the builder's contention that the homeowner had only been successful in about half of her defective works claim and, with the exception of the amount of $3,481.61, she was unsuccessful in her overcharging claim. At [19] and [20], the Tribunal noted the builder's submission that: 1. consideration be given to apportionment of costs based on the level of success of elements of the homeowner's claim based on the decision of McDougall J in Owner's - Strata Plan No 61162 v Lipman; the Owners Strata Plan No 61162 v Building Insurer's Guarantee Corporation [2014] NSWSC 622; or 2. in the alternative, as each had substantial success the appropriate order was that there be no order as to costs in accordance with Hogan v Trustees of the Roman Catholic Church (No 2) [2006] NSWSC 74.
5. At [22], the Tribunal summarised the builder's claim for costs as follows: "22 It was therefore submitted that (a) The builder pay the owner's costs to the date of the Calderbank offer and the owner pay the builder's costs on an indemnity basis thereafter, or (b) The builder pay one third of the owner's costs in HB 13/66643 and the owner pay the builder's costs on claim HB 14/19213, or (c) There be no order as to costs."
6. The Tribunal's conclusions are found at [23] to [31]. In these paragraphs the Tribunal relevantly said as follows: "23 Both parties to these two applications grossly exaggerated their respective claims and only capitulated on substantial items of concession at the last moment. 24 In doing so each has put the other to substantial cost of preparation which was ultimately unnecessary. 25 In their respective submissions the parties have not fully set out the circumstances relevant to a costs order. The owner's submission made much of the fact that the owner was substantially successful (more than 70%) in a claim that was ultimately pressed but that submission ignored the fact that it had been necessary for the builder, up to the time of the hearing, to prepare a defence for a very substantial claim that was ultimately unnecessary. 26 The builder's submission on the relevance of the Calderbank offer was also overstated. … In that regard I am not satisfied the builder has demonstrated the owner was unreasonable in refusing that offer. 27 Much was made in the builder's submission of the decision of McDougall J in Owners Strata Plan 61162 v Lipman, and I accept the wisdom of the words quoted. However, in my experience it is often difficult to generalise as to the relationship between the costs expended by a party and the proportion of success either in monetary terms or in terms of the number of issues on which success or partial success was achieved. 28 In a jurisdiction such as the Tribunal I think it is far safer to rely on the logic relied on in Hogan v Trustees of the Roman Catholic Church (No 2) [2006] NSWSC 74 that where both parties have been substantially successful it is appropriate that there be no order as to costs. 29 Such a position is consistent with the fundamental ethos of the Tribunal as set out in the both the Consumer Trader and Tenancy Tribunal Act s 53(1) (now repealed) and the Civil and Administrative Tribunal Act s 60(1) that the starting point for consideration of a cost application is that each party pay its own costs. 30 I am satisfied that this is an instance in which each party has claimed a sum much larger than it had any intention of pursuing and in doing so each party has caused the other to incur substantial costs. I am not satisfied that any arbitrary allocation of a proportion, such as the one third suggested by the builder, would result in an equitable outcome. …"

The Tribunal's power to award costs

1. Section 53 of the Consumer, Trader and Tenancy Tribunal Act and clause 20 of the Consumer, Trader and Tenancy Tribunal Regulation, relevantly provide as follows: Consumer, Trader and Tenancy Tribunal Act "53 Costs (1) Subject to this section and the regulations, the parties in any proceedings are to pay their own costs. (2) The Tribunal may, in accordance with the regulations, award costs in relation to any proceedings. (3) If costs are to be awarded by the Tribunal in accordance with the regulations, the Tribunal may: (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on the basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis. (4) …" Consumer, Trader and Tenancy Tribunal Regulation "20 Costs generally (1) This clause applies to the awarding of costs by the Tribunal as provided by section 53 of the Act. (2) The Tribunal may award costs in relation to proceedings in respect of which the amount claimed or in dispute is not more than $10,000, or in respect of which no amount is claimed or in dispute, only if the Tribunal is satisfied that there are exceptional circumstances that warrant the awarding of costs. (3) In any proceedings in respect of which the amount claimed or in dispute is more than $10,000 but not more than $30,000, the Tribunal may award costs in relation to the proceedings only if: (a) the Tribunal is satisfied that there are exceptional circumstances that warrant the awarding of costs, or (b) the Tribunal has made an order under section 30 (2) of the Act in relation to the proceedings. (4) In any proceedings in respect of which the amount claimed or in dispute is more than $30,000, the Tribunal may award costs in relation to the proceedings in such circumstances as it thinks fit. (5) Despite any other provision of this clause, the Tribunal may order: (a) … (b) that the costs of any proceedings that the Tribunal considers to be frivolous, vexatious, misconceived or lacking in substance, or that otherwise should not be heard or proceeded with, be paid wholly or in part by the person who instituted the proceedings. (6) …"
2. Section 60 of the NCAT Act and clause 38 of the NCAT Rules, as they applied at the time the builder lodged his claim, relevantly provided as follows: NCAT Act "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) … (4) If costs are to be awarded by the Tribunal, the Tribunal may: (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on the basis set out in Division II of Part 3.2 of the Legal Profession Act 2004 or on any other basis. (5) …" NCAT Rules "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."
3. We have dealt with these provisions in more detail below.

Submissions of the parties

1. Each party has been legally represented in this appeal and they were also legally represented before the Tribunal below. Detailed written submissions for the purpose of this appeal were filed and served by the legal representatives of each party.
2. In support of her submissions, the homeowner also filed and served four folders of documents, which included the Tribunal's decision in the substantive proceedings and the material she and the builder filed in regard to those proceedings, including their respective written submissions on costs.
3. The builder filed a small bundle of documents which included relevant correspondence between the parties and a small selection of the material which was contained in the homeowner's folders of document (e.g. the homeowner's Amended Points of Claim, the decision and reasons for decision of the Tribunal in regard to the substantive hearing of the homeowner's claim and that of the builder).

Submissions of the homeowner

1. The homeowner submitted that the Tribunal's decision was "fatally flawed" and contained significant errors of law "in at least" the following respects: 1. the Tribunal Member did not exercise his discretion judicially - in this regard the homeowner pointed to the following principles set out by the Full Federal Court in Rhodium Australia Pty Ltd v Deputy Commissioner of Taxation [2012] FCAFC 17, at [6] and [7]: "6 The power to award costs is "absolute and unfettered"; see Ruddock at [9]. However, "it must be exercised judicially and not against the successful party except for some reason connected with the case"; see Ruddock at [9]. 7 The following principles which are of direct relevance to this appeal may be discerned from the judgment of Black CJ and French J in Ruddock: - the power of the Court to award costs is absolute and unfettered other than that it must be exercised judicially and not against the successful party except for some reason connected with the case; see Ruddock at [9] and [10]; - ordinarily costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order; see Ruddock at [11]; - a losing party may have had very good legal grounds for its position and have conducted itself in the litigation in an entirely reasonable way; see Ruddock at [13]; and - usually the circumstances in which a successful party is denied all or part of its costs have to do with its conduct of the proceedings; see Ruddock at [15]." The homeowner also relied on the following statement of Black CJ and French J in Ruddock v Vadarlis (No 2) (2001) 115 FCR 229, at [15]: "[15] Usually the circumstances in which a successful party is denied all or part of its costs have to do with its conduct of the proceedings. The rules of Court make specific provision for the case in which a judgment is obtained which is not more favourable than terms previously offered by a respondent: O23 r11. Within the general discretion to award costs, costs may be refused where, for example, the applicant has made an exaggerated claim which has occupied a significant proportion of the proceedings and has succeeded only on a minor aspect of its original claim. Costs may be apportioned according to success or failure on particular distinct or severable issues: … . And a trial judge may award only a proportion of the successful party's costs if the conduct of that party at trial was such as to unreasonably prolong the proceedings: …". The homeowner contended that none of the criteria identified by the Court in Ruddock was present in the prosecution of her claim. That is, there were no circumstances that justified a sanction of the kind contemplated in Ruddock in so far as it related to her claim. In this regard she said she, unlike the respondent, withdrew what she referred to as her "Trade Practices Claim" prior to the hearing and in any event the largest part of the proceedings was taken up with her defects claim in which she was substantially successful. 1. The Tribunal made findings in circumstances where there was no evidence to support those findings - in this regard the homeowner submitted there was no evidence to support the findings the Tribunal made at [24] (each party put the other to substantial cost of preparation which was ultimately unnecessary) and at [30] (each party had claimed a sum much larger than it had any intention of pursuing) of its reasons for decision. The homeowner also contended that these findings were demonstratively wrong and contrary to the evidence - in this regard the homeowner pointed to the material that was before the Tribunal, which she asserted demonstrated that it was she who incurred substantial costs and the builder's costs were minimal. 2. The Tribunal ignored and/or failed to have regard to the substantial body of established case law, which the homeowner submitted supported a finding that she should be awarded her costs, at least on some basis - in this regard the homeowner submitted the Tribunal failed to correctly apply the relevant binding authority that in the absence of evidence of any dilatory conduct the presumption is that a successful party will be awarded costs. In support of this submission the homeowner relied on the following statement of Court of Appeal in Ohn v Walton (1995) 36 NSWLR 77, at [79]: "The usual rationale of making a costs order is that it is just and reasonable that the successful party should be reimbursed for costs incurred, in the absence of grounds connected with the charge or the conduct of the proceedings which make it unjust or unreasonable that there should be such reimbursements." The homeowner also submitted that the general approach taken by courts in costs proceedings is to award costs to the successful party without attempting to differentiate between those issues on which the party was successful and those on which it failed. 1. The Tribunal misdirected itself in exclusively relying on Hogan v Trustees of the Roman Catholic Church (No 2) [2006] NSWSC 74 - the homeowner submitted that this decision was distinguishable as it related to two competing motions and not costs in the substantive matter. 2. Denial of Natural Justice - the homeowner submitted that the adverse finding made by the Tribunal at [30] (each party had claimed a sum much larger than it had any intention of pursuing) was based on pure speculation and reflected an undisclosed bias on the part of the Tribunal. The homeowner went on to say that the finding was a denial of natural justice because the Tribunal Member had not disclosed his adverse view to the parties before he determined the matter so that they could be heard on this issue.
2. The homeowner's submissions equally applied to her application for leave to appeal, in the event that her error of law submissions failed. She also provided detailed reasons in her Notice of appeal as to why she said the decision below was not fair and equitable and why she said it was against the weight of evidence.

Submissions of the builder

1. The builder submitted that each ground of appeal identified by the homeowner should be rejected. He asserted that the Tribunal had not erred in law as asserted by the homeowner and the grounds were otherwise not errors of law but an appeal on the merits. In summary, the builder's contentions were as follows: 1. The homeowner has failed to identify a specific error in the decision of the Tribunal below. Nor has the homeowner identified a "relevant authority to support their (sic) contention that the general principle was binding" on the Tribunal Member. 2. In regard to the homeowner's claim, the starting point under section 53 of the Consumer, Trader and Tenancy Tribunal Act was that each party pay its own costs and not that "costs follow the event". Clause 20 of the Consumer, Trader and Tenancy Tribunal Regulation gave the Tribunal the power to award costs "in such circumstances as [it] thinks fit". The builder submitted that clause 20 extended the powers of the Tribunal beyond the general principle. Hence the Tribunal's power to award costs was unfettered by the general principle. 3. In regard to his claim, the builder submitted that, on the basis of the decision of the Appeal Panel in Nguyen v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen [2015] NSWCATAP 265, at [93] the general principle of costs follow the event applied. The builder submitted that as he had been successful in his claim, he was entitled to his costs and the Tribunal would have taken this into account in making the decision it made. 4. Even if the Tribunal were bound by the general principle in regard to the homeowner's claim, it was not clear that the homeowner was the successful party and that costs would follow the event in her favour. That is, the "event' need not be limited to the final result of the proceedings, but may include the result of the individual issues litigated in the course of the proceedings. The builder submitted that the homeowner had failed in two thirds of the amount she claimed and he had been completely successful in his claim - therefore the general principle arguably fell in his favour. 5. Even if the general principle had applied and the homeowner was the successful party, the general principle would be displaced. In this regard the builder asserted he had been fully successful in his claim, yet the homeowner had been unsuccessful in various aspects of her claim and had pursued and persisted in other aspects of her claim. The builder also cited numerous examples of where the homeowner's conduct was such that it disregarded orders of the Tribunal and filed and served additional material without leave which caused the builder to incur unnecessary expense and unduly protracted the proceedings for which he would normally be compensated in the form of a costs order in his favour. The builder submitted that these would have been factors the Tribunal took into account in making the order it made. 6. The decision in Hogan was not the only authority relied on by the Tribunal - reference was made to a number of other decisions. In any event, the builder submitted, Hogan was not a case where the general principle was overturned - it was a case where both parties had substantial success and therefore the principle did not fall to either party's favour. The builder went on to argue the same was true in the proceeding before the Tribunal below. 7. The homeowner's contention that she was denied procedural fairness was untenable.

Consideration

1. In our opinion, the homeowner's grounds of appeal can conveniently be summarised as follows: 1. the Tribunal made an error in legal principle in that: 1. it failed to exercise its discretion judicially and in accordance with established legal principles; and 2. it misdirected itself in exclusively relying on Hogan (i.e. grounds (1), (3) and (4)); 1. the Tribunal made findings on the basis of no evidence; and in the alternative, the findings of the Tribunal were not supported by the evidence (ground (2)); and 2. the Tribunal denied the homeowner procedural fairness (ground (5)).
2. Each ground arguably raises a question of law. However, the alternative in ground (b) is factual in nature and relevant to the question as to whether leave to appeal should be granted. We have dealt with each group separately.

(a) Error in legal principle - failure to exercise discretion judicially and in accordance with established legal principles

1. There is no dispute that the Tribunal's power to award costs under clause 20(4) of the Consumer, Trader and Tenancy Tribunal Regulation and rule 38(2)(b) of the NCAT Rules is discretionary. Furthermore, it is an unfettered discretion. It is the homeowner's contention that the Tribunal erred in the exercise of its discretion to award costs in her favour and hence erred in law. That is, the homeowner argues the Tribunal made an error of legal principle in the exercise of its discretion and hence its discretion miscarried: see House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504-505; Micallef v ICI Australian Operations Pty Ltd [2001] NSWCA 274 at [45].
2. In Ohn v Walton, at p78, Gleeson CJ said that once a power to award costs has been granted, "it must be exercised in conformity with the principles which the law has established in relation to the exercise of that discretion." In Nguyen v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen [2015] NSWCATAP 265 (Nguyen), at [93], the Appeal Panel noted care must be taken in applying principles developed in relation to different statutory provisions. Accordingly, the starting point is the relevant statutory provision.
3. The power of the CTTT to award costs under clause 20(4) of the Consumer, Trader and Tenancy Tribunal Regulation was considered by the Court of Appeal in Wright v Foresight Constructions [2011] NSWCA 327. The Court of Appeal (per Basten JA) said the following in regard to the power vested in the CTTT under clause 20(4) (at [36]): "36 … [That] provision permitted the Tribunal, in any proceedings in respect of which the amount claimed or in dispute was more than $30,000 to award costs "in relation to the proceedings in such circumstances as it thinks fit". A power conferred in these terms is "unfettered" in the sense that the Tribunal may make such order as it thinks appropriate, so long as it acts in accordance with the subject matter, scope and purpose of the power. In relation to the award of costs in litigation, the accepted purpose is, where costs are awarded in favour of one party, to compensate that party for the expense incurred in respect of the litigation. …"
4. In Antonio v Ian Cubitt's Classic Home Improvements, at [45], the Appeal Panel made the following observation in regard to rule 38 of the NCAT Act and clause 20 of the Consumer, Trader and Tenancy Tribunal Regulation: "… [r 38] establishes substantially the same costs regime for the Consumer and Commercial Division of the Tribunal as applied in the CTTT under cl 20 of the CTTT Regulation."
5. In Nguyen, the Appeal Panel was required to consider the operation of rule 38 of the NCAT Rules and section 60 of the NCAT Act. At [93], the Appeal Panel held that rule 38 operated to displace the requirements of section 60 of the NCAT Act. That is, the applicable power to award costs in proceedings allocated to the Consumer and Commercial Division of the Tribunal and for which the claim in the proceedings exceeds $30,000, or satisfies the requirements of rule 38(2)(a), is rule 38 of the NCAT Rules and not section 60 of the NCAT Act. At [94] and [95], the Appeal Panel went on to describe the nature of the power to award costs under rule 38, as follows: 94 Rule 38 gives the Tribunal (or the Appeal Panel when making a decision in substitution for the decision under appeal), a discretion to award costs. While unfettered that discretion must be exercised judicially. 95 While the discretion to award costs under rule 38 is unfettered, in our view costs should generally "follow the event", recognising however that factors may exist that militate against the successful party recovering all of its costs: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [134]. Fairness dictates that the unsuccessful party typically bears the liability for costs unless it is demonstrated that some other order is appropriate: Currabubula and Paola v State Bank NSW. Currabubula v State Bank NSW [2000] NSWSC 232. We find no reason to depart from the "usual rule" in this case."
6. In the recent decision of Thompson v Chapman [2016] NSWCATAP 6, the Appeal Panel considered the discretion to award costs in clause 20(4) of the Consumer, Trader and Tenancy Tribunal Regulation and rule 38(2)(b) of the NCAT Rules. At [68] to [72], the Appeal Panel made the following observations: "68 Each of Regulation 20 of the CTTT Regulation and Rule 38 provide a general discretion in respect to the award of costs. 69 The starting point in exercising such discretion is that the "usual order for costs" is that a successful party should be entitled to an order for costs in their favour: see Latoudis v Casey [1990] 170 CLR 534 per Mason CJ at 554 and Oshlack v Richmond River Council per McHugh J at 97. 70 The reason for such an order is that it is appropriate for the party who incurred costs caused by the other party in litigation to be reimbursed. Further, an award of costs is by way of an indemnity to the successful party and not as punishment of the unsuccessful party: see Latoudis v Casey per Mason CJ at 543 and McHugh J at 567 and in Oshlack v Richmond River Council per Brennan CJ at 75. 71 Where there is a general discretion for costs there is no absolute rule that, absent disentitling conduct, a successful party is to be compensated by the unsuccessful party nor is there any rule that a successful party might not be ordered to bear the costs of an unsuccessful party: see Oshlack v Richmond River Council per Gaudron and Gummo JJ at 88 and Kirby J at 121 - 123. 72 The factors to be considered in awarding costs in a particular case are not to be confined as to do so would constrain the general discretion. However it is clear from the authorities that factors that might influence whether the usual order for costs should apply and, if so, to what extent include: - Whether, by reason of the relative success of the parties on different issues and the time taken to determine those that an order for costs based on issues should be made: see for example Bostick Australia Pty Ltd v Liddiard (No 2) [2009] NSWSCA 304; and - Whether, by reason of the nature of the proceedings the usual rule should otherwise be displaced in whole or in part: see Oshlack v Richmond River Council per Gaudron and Gummow JJ at 41 - 44."
7. At [75], the Appeal Panel said: "each case must be determined on its own facts." At [76] the Appeal Panel concluded as follows: "76 In short, the proper exercise of the discretion requires the Tribunal to do justice between the parties and to exercise the discretion having regard to relevant considerations and in a manner which is not arbitrary or capricious: see Oshlack v Richmond River Council per Gaudron and Gummo JJ at [22] and McHugh J at 65."
8. The principles set out by the Appeal Panel in Thompson v Chapman are consistent with the decisions relied on by the homeowner in this appeal. The question is whether the Tribunal failed to exercise its discretion judicially and in accordance with established legal principles.
9. In its reasons for decision the Tribunal below in this matter did not set out its understanding of the legal principles applicable to the exercise of the discretion to award costs in the matter before it. But this does not mean it failed to have regard to them. As we have noted, the Tribunal did make reference to the legal authorities relied on by the parties, including the High Court decision in Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 and Oshlack v Richmond River Council (1998) 193 CLR 72. The principles set out in these decisions are well understood. For example, in Latoudis v Casey, at 557, Dawson J said in regard to the courts being vested with the discretion to award costs: "… [Whilst] the discretion was absolute and unfettered, it was to be exercised judicially, that is to say, not by reference to irrelevant or extraneous considerations, but upon facts connected with or leading up to the litigation."
10. In Oshlack v Richmond River Council, at [40], Gaudron and Gummow JJ said the following in respect of a general statutory power to award costs in subsection 69(2) of the Land and Environment Court Act 1979 (NSW): "40 There is no absolute rule with respect to the exercise of the power conferred by a provision such as s69 of the Court Act that, in the absence of disentitling conduct, a successful party is to be compensated by the unsuccessful party. Nor is there any rule that there is no jurisdiction to order a successful party to bear the costs of the unsuccessful party."
11. Subsection 69(2) of the Land and Environment Court Act relevantly provided as follows at that time: "69 Costs (1) … (2) Subject to the rules and subject to any other Act: (a) costs are in the discretion of the Court; (b) the Court may determine by whom and to what extent costs are to be paid; and (c) the Court may order costs to be taxed or otherwise ascertained on a party and party basis or on any other basis."
12. In Oshlack, the appellant had appealed the decision of the NSW Court of Appeal that he pay the respondents' costs in the proceedings below: Richmond River Council v Oshlack (1996) 39 NSWLR 622. Mr Oshlack was unsuccessful in proceedings he commenced, in the NSW Land and Environment Court, in regard to the Council's consent to a Development Proposal. Having successfully defended the claim, the respondent Council and the developer each made an application that Mr Oshlack pay their costs. Mr Oshlack, successfully argued before the trial judge, Stein J, that a costs order should not be made in favour of the Council and the developer because the litigation had been brought in the public interest under "open standing provisions" such as those contained in section 123 of the Environmental Planning and Assessment Act 1979: see Oshlack v Richmond River Council [1994] NSWLEC 20. On appeal, the Court of Appeal held that litigation brought in the public interest was an irrelevant factor and set aside the decision of Stein J to make no orders as to costs and made orders that Mr Oshlack pay the Council's costs and those of the developer.
13. On appeal to the High Court, the majority (Gaudron, Gummow and Kirby JJ) allowed the appeal. At CLR 84 [31], Gaudron and Gummow JJ described the matter in issue before the Court as not being whether the litigation was "public interest litigation" - it was whether "the subject-matter, the scope and purpose of s 69 are such as to enable the Court of Appeal to pronounce the reasons given by Stein J to be ""definitely extraneous to any objects the legislature could have had in view"" in enacting s 69."
14. After considering the antecedents of section 69, at 86 [35], their Honours said the following (citations omitted): "35 In the administration of the discretion conferred by these provisions upon courts of general jurisdiction, practices or guidelines have developed. Observations by Brennan J in Norbis v Norbis are in point. His Honour said […]: "It is one thing to say that principles may be expressed to guide the exercise of a discretion; it is another thing to say that the principles may harden into legal rules which would confine the discretion more narrowly than the Parliament intended. The width of a statutory discretion is determined by the statute; it cannot be narrowed by a legal rule devised by the court to control its exercise". It is in that sense that there is to be understood the earlier statement in this Court as to the existence of "a general rule that a wholly successful defendant should receive his costs unless good reason is shown to the contrary".
15. At 89 [45], their Honours concluded that section 69 should not be narrowly construed and "it is applicable to new species of litigation and the discretion it confers is to be exercised so as to allow for the varied interests at stake in such litigation."
16. The general principle enunciated by the majority in Oshlack continues to apply. That is, there is no absolute rule with respect to the exercise of a general discretion to award costs, that in the absence of disentitling conduct, a successful party is to be compensated by the unsuccessful party.
17. The decision of the Court of Appeal in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304, at [38], summarised 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 did not succeed as follows: "38 …: - 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) 26 IPR 261 at 272."
18. The discretion in clause 20(4) of the Consumer, Trader and Tenancy Tribunal Regulation, as we have noted, is expressed in terms of the Tribunal being granted a power to award costs "in such circumstances as it thinks fit." However, the discretion only arises where the amount claimed or in dispute is more than $30,000. As the authorities make clear, a general power to award costs in such circumstances is not an absolute rule that "costs follow the event", or that there is a presumption that a successful party is entitled to a costs order. The discretion is to be considered in the circumstances of the matter before the Tribunal. Hence, the question is whether, in the circumstances (including the relevant legislative context), it is just and reasonable that the successful party be reimbursed for costs incurred, in the absence of grounds connected with the conduct of the proceedings (i.e. disentitling conduct) which make it unjust or unreasonable that there should be such a reimbursement: Ohn, at [79]. Ultimately, this is a question of fact.
19. The discretion in 38(2)(b) of the NCAT Rules is expressed in different terms, in that the Tribunal is given a discretion to award costs even though there are no special circumstances. In our opinion it should nevertheless be construed in similar terms to clause 20(4). Again, ultimately whether an award for costs is to be made involves questions of fact.
20. In this case, the Tribunal had before it two applications for costs in regard to two substantive claims, one being that of the homeowner and the other being that of the builder. In its reasons for decision, the Tribunal primarily dealt with the manner in which the parties had conducted the proceedings in respect of their respective claims. It is evident from the Tribunal's reasons for decision that these factors influenced its decision, as they were considered to be "disentitling conduct" factors by the homeowner and the builder.
21. The homeowner submits that she had not engaged in any "disentitling conduct" in regard to her claims - the builder contended otherwise. In this regard the builder submitted the homeowner's late withdrawal of her Australian Consumer Law claim was disentitling conduct. The Tribunal took the builder's contentions into consideration in the exercise of its discretion. In her application for costs in the builder's claim, the essence of the homeowner's application was that the builder was disentitled to his costs in that claim because he abandoned a substantial part of his claim at the commencement of the hearing. Again, the Tribunal took the homeowner's contentions into account in the exercise of its discretion.
22. The Tribunal's findings in regard to the "disentitling conduct" of each party are questions of fact. The findings of the Tribunal in this regard are also challenged by the homeowner in this appeal. For the reasons that follow under the heading ground (b), we have found that the findings of the Tribunal were open to it on the evidence and material before it.
23. While we do not find any error in regard to the Tribunal's findings in so far as they relate to "disentitling conduct" of the homeowner and the builder, in our opinion, the Tribunal made an error of legal principle in relying on "the logic" of the decision of the Supreme Court in Hogan v Trustees of the Roman Catholic Church (No 2) [2006] NSWSC 74.
24. As noted by the Tribunal at [19] and [20], the builder had contended in its submissions that in the circumstances consideration should be given to "apportionment of costs based upon the level of success of the elements of the owner's claim" in accordance with the decision of McDougall J in Owners SP 61162 v Lipman and Owners SP 61162 v Building Insurer's Guarantee Corporation [2014] NSWSC 622, or alternatively that there be no order as to costs in accordance with Hogan v Trustees of the Roman Catholic Church (No 2). At [27], the Tribunal rejected the builder's submission in regard to apportionment. The homeowner has not questioned that rejection. And at [28] the Tribunal said, having regard to the jurisdiction of the Tribunal, it thought it was "far safer to rely on the logic" relied on in Hogan where both parties had been substantially successful.
25. Before the Court in Hogan v Trustees of the Roman Catholic Church (No. 2) [2006] NSWSC 74 were two notices of motion, one filed by the plaintiff and the other filed by the defendant. Each notice of motion sought orders that the other party pay interest on the costs and disbursements that were previously awarded in their favour. Orders were made in favour of each party and the Court made "No order as to the costs of each motion." In the judgement of her Honour Justice Bell, the only reference to a costs order in regard to each notice of motion is that set out at [40], which is in the following terms: "40 Each party has had a measure of success with respect to the relief claimed in the plaintiff's motion. The defendants' motion was filed after the plaintiff brought his motion and sought to set off claims for interest on relatively modest assessed costs, which had been paid a number of years earlier. The two motions proceeded in tandem and although the defendants were substantially successful with respect to their motion I have concluded that it is appropriate that there be no order as to costs with respect to each of the motion."
26. The homeowner has not contended that this decision was not open to Her Honour on the basis of the material before her, or that Her Honour erred in law in the exercise of her discretion.
27. While the Tribunal might be criticised in regard to the adequacy of its reasons, this is not a ground of appeal relied on by the homeowner. The question is whether the Tribunal erred in law in relying on "the logic" of the decision in Hogan. In our opinion, the Tribunal did err in that the decision in Hogan was of no relevance to the matters in issue before the Tribunal below, nor did the decision contain any legal principle relevant to a general discretion to award costs. The decision in Hogan was entirely based on the circumstances of the matter before the Supreme Court, which were of no relevance to the matters before the Tribunal below. This does not mean that in the exercise of its discretion it was not open to the Tribunal to make an order rejecting the respective costs order applications of the homeowner and the builder. However, a decision of this kind must be made having regard to the relevant principles and the respective claims of each party and not on the basis of factual findings in an unrelated matter. As noted by the Appeal Panel in CPD Holdings Pty Limited v Baguley [2016] NSWCATAP 103 at [4], where the Tribunal hears and determines two applications and applications for costs are made in respect of each application, the correct approach is for the Tribunal to deal with each application separately.
28. We are also concerned about the Tribunal's remarks, at [29] of its reasons for decision, about "the fundamental ethos of the Tribunal" as set out in subsection 53(1) of the Consumer Trader and Tenancy Tribunal Act and subsection 60(1) of the NCAT Act that "the starting point for consideration of a cost application is that each party pay its own costs." It is unclear what the Tribunal meant by this remark. What is clear is that where a claim or dispute before the CTTT or the Tribunal in the Consumer and Commercial Division exceeds $30,000, there is no starting point for consideration of a cost application, as the Tribunal's power to award costs in such circumstances is entirely discretionary. That is, clause 20(4) of the Consumer, Trader and Tenancy Tribunal Regulation, or rule 38(2)(b) of the NCAT Rules is the applicable power and not subsection 53(1) of the Consumer Trader and Tenancy Tribunal Act, or subsection 60(1) of the NCAT Act. In the exercise of that discretion, however, the circumstances of a particular case may warrant the making of an order to the effect that there be no order as to costs.
29. Accordingly, we find the Tribunal did make an error of legal principle in the exercise of its discretion and on that basis its discretion miscarried, which is an error of law.

(b) No evidence/ findings not supported by the evidence

1. As noted by the homeowner in her submissions, in Kostas v HIA Insurance Services Pty Limited [2010] HCA 32; (2010) 241 CLR 390, at 418 [91], the High Court (per Hayne, Heydon, Crennan and Kiefel JJ), said "a tribunal that decides a question of fact when there is "no evidence" in support of the finding makes an error of law."
2. The "no evidence" principle giving rise to an error of law was described Minister for Immigration and Multicultural Affairs v Al-Miahi (2001) 65 ALD 141; [2001] FCA 744, at [38] where the Court said: "A decision may be based upon the existence of many particular facts. It will be based upon the existence of each particular fact that is critical to the making of a decision. A small factual link in the chain of reasoning, if it is truly a link in a chain and there are no parallel links, may be just as critical to the decision, and just as much a fact upon which the decision is based, as a fact that it is of more obvious immediate importance. If a decision is in truth based, in that sense, on a particular fact for which there is no evidence, and the fact does not exist, the decision is flawed, whatever the relative importance of that fact. (Emphasis in original.)"
3. However, there is no error of law "simply in making a wrong finding of fact": see Waterford v Commonwealth (1987) 163 CLR 54 at 77; 71 ALR 673 at 689; 12 ALD 741 at 743.
4. In our opinion, on the material before us it is difficult to find that there was no evidence before the Tribunal from which it could make a finding that each party put the other party to substantial costs of preparation which were ultimately unnecessary, or that each party had claimed a sum much larger than it had an intention of pursuing.
5. In this regard the Tribunal had the benefit of hearing from the parties during the two days of hearing. We have not been provided with a copy of the transcript of that hearing.
6. The evidence before us is that each party withdrew substantive aspects of their respective claim several days before the hearing and on the day of the hearing. The homeowner's Australian Consumer Law claim was for a substantial amount (i.e. $165,897). The evidence is that the builder's solicitor did not receive advice of the homeowner's withdrawal of that claim until two days before the hearing. The homeowner has not disputed that the builder incurred costs in defending this claim up until he was advised it was not going to be pressed. The builder contended he had expended considerable costs in regard to that claim. This is disputed by the homeowner on the basis of the material contained in the folders of documents she filed in this appeal. The homeowner did not draw our attention to any particular document, or lack thereof in support of her contention. In any event, in our opinion, even if the builder had filed limited material in response to the homeowner's Australian Consumer Law claim this does not necessarily reflect what the builder expended in legal costs to defend the claim.
7. The builder also withdrew his claim in regard to the second invoice he had issued. It was withdrawn on the day of the hearing and the amount invoiced in this invoice was considerably greater than what was claimed in the first invoice.
8. The builder was entirely successful in his claim in regard to the first invoice. In this appeal, the homeowner has submitted that she had at no time disputed the amount invoiced in the first invoice.
9. The homeowner was not entirely successful in the claim she pressed at the hearing. The builder contended the homeowner's claim was "grossly exaggerated": see the Tribunal's reasons for decision of 3 July 2015, at [23].
10. There were three aspects to the homeowner's claim - damages for defective work ($266,396), temporary relocation ($25,230), and re-imbursement for overcharging ($18,273.34). Her temporary relocation claim was unsuccessful, as her expert agreed, during cross-examination, that there was no need for any relocation. The Tribunal awarded the homeowner an amount of $147,233.95 in damages for the defective work and $3,481.61 in re-imbursement, being the amount admitted by the builder.
11. On the basis of this evidence it cannot be said there was no evidence before the Tribunal to make the findings it made. Additionally, while there might be differing views about the manner in which the parties conducted their respective claims before the Tribunal below, in our opinion, on the material before us we cannot find that the findings made by the Tribunal were not open to it on the evidence.

(b) Denial of procedural fairness

1. Subsection 38(2) of the NCAT Act provides the Tribunal "is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice." The common law rules of natural justice are commonly referred to as the rules of procedural fairness. A denial of procedural fairness gives rise to a question of law: see John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13(1)].
2. As pointed out by Mark Aronson and Mathew Groves in "Judicial Review of Administrative Action" (5th ed 2013, Thomson Reuters), at [7.20], there are two traditional rules of natural justice - the hearing rule and the bias rule. The rules of natural justice are generally described as being procedural in that they address the manner in which a decision is made and not the merits of the decision itself
3. Many aspects of the hearing rule are found in section 38 of the NCAT Act. In Re Minister for Immigration and Multicultural Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1, at [37], Gleeson CJ made the following remarks in regard to the concept of procedural fairness: "Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice."
4. At the same time it is accepted that the rules of procedural fairness in so far as they relate to proceedings before the Tribunal are to be considered in the context of the guiding principle of the Tribunal set out in subs 36(1) of the NCAT Act: see Gallo v Duflou [2014] NSWCATAP 115 at [28]ff and Amad El Ahmad t/as Cars for Everyone v Imelda Reyes [2015] NSWCATAP 50 at [16]ff. The guiding principle in that subsection for the NCAT Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.
5. It is the homeowner's contention that the Tribunal's finding that "each party has claimed a sum much larger than it had any intention of pursuing and caused the other to incur substantial costs", was a finding adverse to her interests and was made without her having an opportunity to be heard on this issue. Again she asserts the finding was not open on the evidence. We have dealt with this aspect above and found that the Tribunal's finding was open to it on the evidence.
6. We have some difficulty in understanding how the Tribunal's finding was adverse to the appellant's interests, or why it is said she was not given an opportunity to be heard. As we have already noted, shortly before and at the hearing each party abandoned a substantial portion of their claim and there was no dispute that they respectively incurred costs in defending the abandoned claim of the opposing party. Furthermore, each party placed considerable reliance on this as a basis to have costs awarded in their favour. Hence, the homeowner was given every opportunity to address this issue - which she did.
7. We assume it is the Tribunal's remark about having no intention of pursuing the claims that were abandoned which is of concern to the homeowner. However, the remark was not addressed to her alone - it was directed at both parties.
8. The homeowner also contends that the finding reflects an "undisclosed bias" on the part of the Tribunal Member, which disabled him from bringing an open mind to her submissions. For the reasons that follow, we are not satisfied the homeowner has established this ground.
9. There are two aspects to bias, actual bias and apprehended bias. The homeowner does not specify whether she asserts actual or apprehended bias. In Saurine v Coral Homes Qld Pty Ltd [2015] NSWCATAP 147, at [18] and [20], the Appeal Panel briefly set out the principles applicable to actual and apprehended bias as follows: "18 Bias can be actual or apprehended: Bogoevski v Stricklands [2015] NSWCATAP 133 at [110]. … Actual bias usually, but not universally, contemplates an "interest" (whether financial or otherwise) by the judicial officer (in this case the Tribunal member) in the outcome of the proceedings. No such claim is made in this appeal. … 19 … 20 The relevant principles in determining whether there is apprehended bias and how they are to be applied were explained by the High Court of Australia in Ebner v Official Trustee in Bankruptcy [2000] HCA 63 at [6], where the High Court stated: "Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge (or other judicial officer or juror), as here, the governing principle is that, subject to qualifications relating to waiver (which is not presently relevant) or necessity (which may be relevant to the second appeal), a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that a tribunal be independent and impartial.""
10. In Ebner v Official Trustee in Bankruptcy [2000] HCA 63 at [8], the High Court said the following in regard to the apprehended bias principle: "8. The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge (or juror) has an "interest" in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed."
11. It is well accepted that the test to be applied in determining whether there is an apprehension of bias is an objective one, namely "whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide": see Michael Wilson & Partners Ltd v Nicholls [2011] HCA 48 at [31]. At [33], the High Court (per Gummow ACJ, Hayne, Crennan and Bell JJ) said the following: 33. Because the test is objective it is important to keep an inquiry about apprehension of bias distinct from any inquiry about actual bias. An inquiry about actual bias in the form of prejudgment would require assessment of the state of mind of the judge in question. No doubt that would have to be done, at least for the most part, on the basis of what the judge had said and done. But to allow an inquiry about whether the judge had in fact prejudged some issue to enter into a debate about what a fair-minded lay observer might apprehend is to introduce considerations that are irrelevant to the issue that is to be decided when a party submits that there is or was a reasonable apprehension of. ..."
12. In our opinion there is no basis to make a finding of actual bias. It is clear from the Tribunal's reasons for decision that it considered the submissions of the homeowner. The fact that these were not accepted by the Tribunal does not mean that the Tribunal had pre-judged the matter for determination. On the contrary, the Tribunal dealt with the submissions of both parties and determined the matter on the merits.
13. Nor are we satisfied that here is any basis to make a finding of apprehended bias. The appellant has not demonstrated that a fair-minded lay observer might reasonably have apprehended that the tribunal below might not bring an impartial mind to the resolution of the questions the Tribunal was required to decide.

Leave to appeal

1. In light of our finding that the Tribunal erred in law it is unnecessary for us to deal with the homeowner's application for leave to appeal.

Conclusions and orders

1. For the reasons set out above we find the homeowner has established that the Tribunal made an error of legal principle in the exercise of its discretion in determining her costs application and on this basis her appeal should be allowed. The appropriate order, in light of our finding, is to set aside order 2 made by the Tribunal below and to remit the matter for reconsideration.
2. As the Tribunal made a single order in regard to the homeowner's application for costs and the builder's application for costs, a setting aside of that order and remitting the matter for reconsideration would result in both applications being remitted for reconsideration. In our opinion, this is the most appropriate course even though the builder did not appeal the decision of the Tribunal.
3. Accordingly we order: 1. The appeal is allowed. 2. Order 2 of the decision of the Tribunal made on 3 September 2015 is set aside. 3. The matter is to be reconsidered by the Tribunal in accordance to law.

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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: 08 September 2016