Young v Di Cesare T/As CPC Quality Smash Repairs (No 2)

(See [2025] NSWCATAP 124)

1. The Appellants on 16 June 2025 filed an application for costs with detailed supporting documents.
2. The Appellants consented to the consideration of their costs application on the papers pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 ("the CAT Act") without the need for a hearing.
3. The Respondent filed no materials.
4. We are satisfied the issues in respect of costs can be adequately determined in the absence of the parties by considering the written submissions and supporting materials lodged in support of the application.

1. The Appellants seek as recoverable costs disbursements which were incurred in respect of the first instance hearing and also on appeal.
2. The total claimed is $3,448.24.

1. The Appellants argue that as the Appeal Panel determined to set aside the orders which were the subject of their appeal and also exercised the powers under s 80(3) of the CAT Act to determine the appeal by way of rehearing, the Appeal Panel should also award their costs (limited to disbursements) which have been incurred from the commencement of their original application.
2. The Appellants also accept that in order for them to succeed they have to demonstrate, in the first instance, that there are special circumstances warranting an award of costs.

1. The Appellants' arguments can be summarised as follows:

(1) The Respondent conducted the proceedings in a way that unnecessarily disadvantaged the Appellants in breach of s 60(2)(a) of the CAT Act.

(2) The Respondent was responsible for prolonging unreasonably the time taken to complete proceedings in breach of s 60(2)(b) of the CAT Act.

(3) In respect of the relative strengths of the claims made by the parties the Respondent had no "defence" and if the Respondent had any defence it was never articulated.

(4) The Respondent made claims which had no basis in fact or law in breach of s 60(2)(c) of the CAT Act.

(5) The Respondent refused or failed to comply with a duty imposed by s 36(3) of the CAT Act.

Relevant Principles in Respect of an Award of Costs

1. Section 60 of the CAT Act regulates costs of proceedings in the Tribunal. Section 60 provides:

60 Costs

(1) Each party to the 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) 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.

1. The usual rule is that a party is to pay his, her or its own costs of proceedings but, as the legislation makes clear, the Tribunal may make an order for costs if satisfied that there are "special circumstances": s 60(2).
2. Special circumstances are circumstances that are out of the ordinary. It is not necessary to establish extraordinary or exceptional circumstances: see Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11] referring to Cripps v G&M Dawson Pty Ltd [2006] NSWCA 81 per Santow JA at [60]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [32].
3. The onus is on the party seeking an order for costs to satisfy the Tribunal in the exercise of its discretion under s 60(2) that there are special circumstances warranting an award of costs in its favour: see McEwan v Port Stephens Council (No 2) [2022] NSWCATAP 386 at [38].
4. The exercise of that discretion requires the Tribunal to weigh whether the circumstances are sufficient to amount to special circumstances that justify departing from the general rule that each party bear its own costs.
5. Each case will depend on its own particular facts and circumstances: Brunsprop Pty Ltd v Joanne Hay and Wes Davies [2015] NSWCATAP 152 at [27].
6. Mere success (or failure) of an application does not give rise to special circumstances: The Owners - Strata Plan 5319 v Price [2020] NSWCATAP 245 at [46].
7. The discretion to award costs must be exercised judicially and having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs: see eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48].
8. The decision to award costs pursuant to s 60(2) involves, in effect, two discretionary decisions. The first is to the Tribunal's satisfaction that there are special circumstances warranting an award of costs. The satisfaction involves a degree of subjectivity and thus, in a broad sense, is a discretionary decision (see, for example, Coal and Allied Operations Pty Ltd v AIRC (2000) 203 CLR 194 at [20] per Gleeson CJ, Gaudron and Hayne JJ in respect of similar legislative provisions).
9. As s 60(2) makes clear, if the requisite satisfaction is reached, the Tribunal 'may' make the order. Satisfaction as to the existence of special circumstances merely enlivens the discretion to award costs rather than mandating an award of costs: Al Aaraj v Commissioner of Police, NSW Police Force (No 2) [2025] NSWCATAP 166 at [40]. This necessitates the making of a further discretionary decision (which we term the overall discretion) as to whether in all the circumstances, an award for costs should be made. Satisfaction as to special circumstances does not mandate that an order for costs be made: for example, Brodyn Pty Ltd v Owners Corporation - Strata Plan SNP 73019 (No 2) [2016] NSWCATAP 224 at [32].
10. If the Tribunal has regard for the matters set out in s 60(3) the matters must be given due weight.
11. In respect of s 60(3)(c) (not tenable in fact or law) it must be established that the claim is so obviously untenable that it cannot possibly succeed: (see, for example, James v Department of Justice (Corrective Services NSW) (No 2) [2022] NSWCATAP 216 at [24]).
12. In respect of s 60(3)(e) (whether proceedings are frivolous or vexatious or otherwise misconceived or lacking in substance), the appeal panel of the Tribunal has adopted the statement of Ipp JA in Owners Corporation - Strata Plan 4521 v Zouk & Anor [2007] NSWCA 231 at [45] that "lacking in substance" means not "reasonably arguable". It is a meaning, held his Honour, not dissimilar to "frivolous, vexatious, misconceived": Zucker v Burbank Montague Pty Ltd [2018] NSWCATAP 135 at [52] adopts this reasoning to s 60 of the CAT Act ("Zucker").
13. Special circumstances may be established because a claim is lacking in substance even if such a finding was not expressly made in determining the substantive application provided such a finding is not inconsistent with the reasons given for dismissing the application: Zucker at [52].
14. In respect of the discretion to be exercised by the Tribunal the principles applicable to awarding costs generally must also be taken into account. Those include:

(1) costs are compensatory: Latoudis v Casey (1990) 190 CLR 334;

(2) an unsuccessful party bears the costs of the successful party: Oshlac v Richmond River Council [1998] HCA 11 at [134].

1. An award of costs is intended to be compensatory and not punitive: Grasso v The Owners - Strata Plan No 52399 [2022] NSWCATAP 91 at [12(6)].
2. Overall, what is required is for the Tribunal to exercise its discretion in a manner which is fair and reasonable having regard to the particular circumstances of a particular case.

1. We accept that the Tribunal is entitled to consider the application for costs in respect of the initial hearing the subject of the appeal.

1. The costs which the Appellants seek in respect of the first instance hearing up to the Decision on 31 October 2024 total $1,948.29.
2. Those costs can be summarised as follows:

(1) A filing fee of $111.44.

(2) A Summons fee of $49.20.

(3) Costs of an expert report $1,650.00.

(4) Express Post expenses between 30 November 2022 to 22 October 2024 totalling $137.65.

1. The costs which the Appellants seek in respect of the appeal appear to be for $1,499.95 made up as follows:

(1) Audio transcript fee and transcription fee of $883.05.

(2) Filing fees totalling $555.90.

(3) Postage January to March 2025 totalling $61.00.

1. We deal first with the costs of appeal.
2. We are not satisfied that there are special circumstances enlivening the Tribunal's discretion to award the costs sought.
3. On 21 February 2025, the Respondent notified the Tribunal that the Respondent would not be participating in the hearing of the appeal and will abide by the decision of the Appeal Panel. This advice was provided after the Respondent had not filed any materials in opposition to the appeal and the Registrar had sought clarification from the Respondent's solicitors as to the Respondent's intentions.
4. In our view, the Respondent did not conduct the appeal proceedings in a way which unnecessarily disadvantaged the Appellants and was not responsible for prolonging unreasonably the time taken to allow the appeal to be completed.
5. On the appeal the Respondent made no claims that had no tenable basis in fact or law and were prepared to abide by the outcome.
6. We do not regard the other factors in s 60(3) as having material relevance to our satisfaction, or otherwise, as to special circumstances.
7. The disbursements claimed for the appeal were incurred in the normal circumstances of an appeal and there is nothing out of the ordinary in incurring such costs.
8. We decline the Appellants' claim for their (limited) costs of the appeal.

1. The factors which we regard as important to have regard for in considering whether we can be satisfied that special circumstances exist are the following:

(1) The Appellants (Applicants) in their original application filed recognised that they may be liable for an amount to bring their liability up to $20,000, plus GST - the amount they originally authorised for the repairs to the vehicle.

(2) The Respondent never engaged in any meaningful way with the Appellants' carefully articulated case in respect of their contractual and statutory claims and despite directions to file and serve responses to those claims, never did so.

(3) The Respondent instead, or in addition, maintained, without spelling out the legal and factual basis for doing so, that a substantial part of the Appellants' claim was out of time which was without substance.

(4) The strength of the Appellants' claim far outweighed the Respondent's claims as to an entitlement to payment for all work performed irrespective of the actual terms of their arrangement with the Appellant.

(5) The Respondent's conduct of the proceedings in non-compliance with directions and repeated requests for adjournments prolonged unreasonably the time taken to complete the proceedings. This is illustrated, for example by the reasons of the Tribunal on 15 November 2023 in respect of an application for an adjournment sought by the Respondent (which was granted) but accompanied by a direction that not less than 14 days before the next hearing date the Respondent must confirm that they will attend the hearing, necessary, it appears, because of the absence of a clear indication as to how the proceedings should be further conducted. The Tribunal noted that it had concerns with the way the Respondent had conducted her case and that the Appellants had a right to have their case determined.

(6) There were also a number of occasions when directions issued by the Tribunal, such as to the filing of a chronology of significant events and times, filing of statements by due date, as opposed to drafts resulted in material being filed that were subsequently replaced with signed copies without identifying how the contents differed, bringing into question compliance by the Respondent with the obligations set out in s 36(3) of the CAT Act.

1. Having regard for these factors we are satisfied that special circumstances exist for warranting an award of costs.
2. In exercising our general discretion we have decided to exclude the costs claimed for the expert report. As our decision in the appeal shows, that report had no bearing on the outcome.

1. The Appellants should be entitled to their out-of-pocket expenses (other than $1,650.00) being a total of $298.29. By reason of order 9 made in the substantive appeal the amount referred to in order 3 is reduced by $298.29.

(1) A hearing of the application for costs is dispensed with.

(2) The Appellants are entitled to costs in the sum of $298.29 in respect of the first instance proceedings.

(3) The claims for costs on the appeal are dismissed.

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.