YKD v YKE (No 2)

1. Although the orders of the Appeal Panel of 6 January 2025 contemplated that any costs application would be determined on the papers and without a hearing, it is necessary, if the Appeal Panel is to do so, that an order be made pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act) dispensing with a hearing. The Tribunal is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering the written submissions made by them, and the Appeal Panel's Reasons for Decision for dismissing YKD's appeal of 6 January 2025. The Tribunal is satisfied that, having regard to their written submissions, neither party opposes an order dispensing with a hearing and that s 50(3) of the CAT Act has accordingly been satisfied.

1. Section 60(1) of the CAT Act provides that each party to proceedings in the Tribunal is to pay the party's own costs of proceedings. Section 60(2) however provides that the Tribunal may award costs in relation to proceedings "only if it is satisfied that there are special circumstances warranting an award of costs". Section 60(3) provides that in determining whether there are special circumstances warranting an award of costs the Tribunal "may" have regard to a number of factors. YKE relies on the provisions of s 60(3)(c) and (e) of the CAT Act:

"(c) the relative strength 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,

(e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance."

1. Section 60(4) provides that, if costs are to be awarded, 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 the legal costs legislation (as defined in s 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis"

1. Section 60(5) defines "costs" to include a number of matters. If YKE establishes an entitlement to an award of costs, the sum claimed by him comprises matters which fall within the definition of "costs" in s 60(5) of the CAT Act (Malkinson v Trim [2002] EWCA Civ 1273; (2003) 2 All ER 356).

1. The principles governing YKE's costs application are not in doubt and require only brief reiteration. In Cripps v G & M Dawson [2006] NSWCA 81 it was accepted in relation to the term "special circumstances" that "It suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional. While a finding of serious unfairness is not a prerequisite to determining that there are special circumstances, it is nonetheless a highly relevant consideration". In CEU v University of Technology Sydney [2017] NSWCA 280, at [4], the Court of Appeal also accepted that "To establish special circumstances, it is sufficient that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional". The Tribunal has consistently approached "special circumstances" on that basis.
2. With respect to the expression "no tenable basis in fact or law" in s 60(3)(c) of the CAT Act, the dismissal of YKD's appeal, and the Appeal Panel's reasons for it, suggest that YKD's challenges to the decision at first instance lacked a tenable basis in fact or law.
3. A complaint is said to be lacking in substance when it is demonstrated that there exists no factual basis for the allegation or that the complaint is not reasonably arguable (Langley v Niland & Anor [1981] 2 NSWLR 104).

1. YKE sought costs in the sum of $2,250, comprising $2,200 for legal advice provided to him by a New South Wales law firm, and $50 for the costs of printing and posting copies of his submissions. YKE submitted that YKD's appeal "was always doomed to fail" which "should have been obvious" to YKD "based on the number of previously unsuccessful NCAT proceedings he has instigated where he relied on the same material". YKE relied on the Appeal Panel's reasons for dismissal of the appeal, and particularly where, at [40], the Appeal Panel said that "In reality, under the guise of an appeal, the Appellant has simply reagitated the submissions which he unsuccessfully made before the Tribunal at first instance".
2. YKE's submissions at [4] do not materially advance his claim. YKE submitted that "Awarding costs in this matter will also act as a deterrent for future frivolous, vexatious and misconstrued applications" from YKD with respect to YKE's mother. As is not in doubt, the purpose of an order for costs is to compensate a successful party rather than to punish an unsuccessful party, although that may well be the effect of making a costs order (Oshlack v Richmond River Council (1998) 193 CLR72; [1998] HCA 11).
3. Although the conduct of a party, including the party's subjective motives and conduct of the litigation can be a relevant factor for the Tribunal to take into account in determining a costs application pursuant to s 60(3)(a) or (g) of the CAT Act, having not expressly relied on either of those provisions in support of his costs application, YKE's submissions with respect to YKD's motivation or any deterrent to his bringing further proceedings does not influence our decision.

1. YKD opposed any order for costs. Under the heading "Background", YKD made a number of submissions and unsubstantiated allegations which do not materially assist his resistance of the costs application.
2. Relevantly, YKD submitted that YKE's claim was "at best doubtful and questionable" for a variety of reasons:

(a) YKE resides in Melbourne while the solicitor he consulted has offices in Maitland NSW which "implies that all consultation was conducted remotely, most likely by phone". The assistance was provided by the solicitor and finalised over a short period of time before YKE's submission was lodged and well before the hearing date;

(b) YKE's submission contained on a completed reply form and repeated statements from previous hearings with no obvious changes made on the hours of advice from the solicitor;

(c) the quantum of the account strongly implies that multiple hours were spent in consultation on the phone - probably in excess of six hours;

(d) the solicitor has provided no note as to the nature of the consultation or documentation prepared;

(e) the quantum is a "rather neat, rounded figure that appears unusual and is out of line with the previous claims and details" made by the solicitor;

(f) YKE has "failed to include any detailed justification for his claim and not provided an itemised bill which is his right in relation to legal costs and expected". The invoice directed to YKE has been outstanding for over four months with "no indication that he had settled or had any intention to settle the account within a usual commercial timeframe previously claimed" by the solicitor and the "sundry costs claimed by (YKE) is also doubtful and without any supporting evidence or detail".

1. It is first necessary to consider whether YKE establishes special circumstances enlivening the discretion to make an award of costs. Largely for the reasons recorded in the Tribunal's decision of 6 January 2025, the Appeal Panel is satisfied that YKD made claims in the appeal which had no tenable basis in fact or law in accordance with s 60(3)(c) of the CAT Act. On the same basis, the Appeal Panel is satisfied that YKD's appeal was "misconceived or lacking in substance". The Appeal Panel is satisfied that, although not exceptional, or needing to be exceptional, the circumstances revealed by YKD's unsuccessful appeal are out of the ordinary. Whatever their ultimate fate, it is out of the ordinary for appellants to do no more than reagitate submissions on appeal which have been made previously without success. The Appeal Panel is satisfied that the discretion to award costs is thus enlivened.
2. Section 60(4)(b) of the CAT Act provides the basis on which costs may be awarded. As YKE seeks a sum certain by way of costs, as opposed to an award of costs assessed in accordance with the legal costs legislation, he is seeking an award of costs on "any other basis". Although permissible, as such an award represents a departure from the usual order, YKD's submissions with respect to the quantum of any costs which might be awarded require consideration.
3. There is force in a number of YKD's submissions with respect to the solicitors' invoice of 4 October 2024. Other than recording "To our professional costs associated with assisting you in relation (to) the NCAT appeal filed by (YKD) and response submissions required to be filed in relation to the said appeal" for which a sum of $2,000 plus GST of $200 was billed, the solicitors' "Tax Invoice" gives no indication of any of the matters which would be required to be included in a bill of costs in taxable form in accordance with the legal costs legislation. As YKD submitted, the tax invoice gives no indication of the hours involved, the hourly rate charged or the day or days on which work was done and/or conferences, by telephone or otherwise, with YKE occurred. These matters militate against awarding YKE a lump sum costs order.
4. Conversely, given the contents of the written submissions filed by YKE in respect of which he obtained legal advice from the solicitors, it would be reasonable to expect at least several hours to have been expended by the solicitors in reading the reasons of the Tribunal at first instance, considering YKD's appeal submissions, conferring with YKE and drafting his responding submissions. Although the Appeal Panel does not profess expertise in cost assessment, we are confident that the cost, potentially ultimately borne by YKD, of making an order that YKD pay YKE's costs be agreed or assessed would be disproportionate to the amount, if any, by which the solicitors' account would be likely to be reduced.
5. Notwithstanding the deficiencies in the solicitors' tax invoice, the Appeal Panel does not reject the quantum of the legal fees claimed by YKE as being excessive or unreasonable. There is no reason to doubt that YKE owes the solicitors the sum which he claims to owe them. Although not expressly raised by YKD's submissions, as a matter of procedural fairness to an unrepresented litigant, the Appeal Panel feels obliged to consider whether YKE should be awarded the totality of the costs sought by him.
6. It is clear that YKE seeks the whole of the legal expenses which he has incurred on a solicitor-client basis. If YKE is awarded the sum he seeks, he will have been awarded indemnity costs. In New South Wales, there is no distinction between solicitor-client and indemnity costs (Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (No 2) [2011] NSWCA 171).
7. The discretion to award indemnity costs must be exercised judicially (Mead v Watson [2005] NSWCA 133) and with caution (Leichhardt Municipal Council v Green [2004] NSWCA 341). Where the discretion to award indemnity costs is exercised the reasons for doing so should be the subject of careful reasoning (Degmam Pty Limited (in Liq) v Wright (No. 2) [1983] 2 NSWLR 354). There is no fixed rule or rationale as to when an indemnity order might be made (Harrison v Schipp [2001] NSWCA 13) although there needs to be a "sufficient or unusual feature" (Colgate Palmolive Co v Cussons Pty Limited (1993) 46 FCR 225). The discretion may be enlivened where there has been "relevant delinquency" (Oshlack) in the sense of conduct relevant to the conduct of the case (Ingot Capital Investment v Macquarie Equity Capital Markets Ltd (No. 7) [2008] NSWSC 199). An award of indemnity costs remains compensatory and not punitive (Hamod v State of NSW (2002) FCAFC 97). A "formal warning" of an intention to claim indemnity costs may enhance the prospects of obtaining such an order (Huntsman Chemical Co Aust Ltd v International Pools Aust Pty Ltd [1995] 36 NSWLR 242).
8. The power to make an indemnity costs order is an important case management tool as it promotes the making of settlement offers and discourages the litigation of cases where there are no reasonable prospects of success (Chaina v Alvaro Homes Pty Limited [2008] NSWCA 353), or where a reasonable offer of settlement has been made. A recognised ground for an award of indemnity costs involves a party who commences, continues or defends proceedings which have no prospect of success (Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Ltd (No. 2) [2009] NSWCA 12). Mere weakness of an arguable case is insufficient to warrant an exercise of the discretion to award indemnity costs (Wentworth v Rogers (No. 5) [1986] 6 NSWLR 534).
9. In this case, although YKD's appeal was found to be without merit, and "weak", and was thus "arguably hopeless", the Tribunal is not comfortably satisfied that it was. Significantly, in view of the statutory presumption against costs articulated in s 60(1)(a) of the CAT Act, there is no evidence establishing that YKD was ever put on notice that, if he persisted with his appeal, and it was unsuccessful, YKE would seek an award of costs, or of indemnity costs. Had YKE done so, the discretion to award YKE indemnity costs would have been enlivened. Although it may not have caused YKD to reconsider pursuing his appeal, as the authorities referred to above confirm, putting an opponent on notice of an intention to seek costs if he/she persists with an unsuccessful proceeding is not merely a formality, and plays an important role in facilitating "just, cheap and quick" resolution of proceedings in accordance with the "guiding principle" articulated in s 36(1) of the CAT Act.
10. In all the circumstances, the Appeal Panel is persuaded that the appropriate order is that YKD pay YKE's costs on a party and party basis. As a "rule of thumb" party and party costs determined without formal assessment commonly approximate two-thirds of the quantum of solicitor and client costs. The Appeal Panel is comfortably satisfied that an award of costs in the sum of $1,466, plus $50 for disbursements would be appropriate and can properly be accommodated within the terms of s 60(4)(b) of the CAT Act. To the extent that such an award is arguably somewhat arbitrary, the Appeal Panel is satisfied that the cost and inconvenience for the parties of an award of costs involving assessment provides support for our decision.

(1) Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) the Appeal Panel dispenses with a hearing of these proceedings.

(2) Within 30 days from the date of this order, YKD pay YKE's costs of and incidental to YKD's appeal assessed in the sum of $1,516.

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.