ZMU Pty Ltd v Station Vista Pty Ltd;; Station Vista Pty Ltd v ZMU Pty Ltd

1. Orders were made, giving the parties the opportunity to file cost submissions. Written submissions by counsel for both parties have been filed with the Tribunal.
2. Neither party has sought to make oral submissions. Station Vista's costs application will therefore be decided on the papers pursuant to section 50(2) of the Civil and Administrative Tribunal Act 2013 (CAT Act).

1. The Tribunal's jurisdiction to award costs is found in section 60 of the CAT Act (section 60) and Rule 38 of the Civil and Administrative Tribunal Rules 2014 (Rule 38).
2. Section 60 provides that each party to proceedings in the Tribunal is to pay the party's own costs. The section, however, goes on to provide that the Tribunal may make a costs order where there are special circumstances warranting the award of costs.
3. Rule 38 provides that where proceedings for the exercise of functions of the Tribunal have been allocated to the Consumer and Commercial Division, then despite section 60, the Tribunal may award costs in the absence of special circumstances warranting such an award if the amount claimed in dispute in the proceedings is more than $30,000 (Rule 38(2)(b)).
4. In the application filed with the Tribunal, the ZMU claimed $57,029.80. It is not in dispute that in seeking that amount, Rule 38 has been engaged, permitting the Tribunal to award costs in the absence of special circumstances.

1. On behalf of ZMU, Mr Di Lizia of Counsel submits that there should be no order as to costs in the proceedings, that is, each party bear its own costs. The basis for this submission, in short, is that Station Vista first contended the Tribunal did not have jurisdiction to hear ZMU's application in written submissions served on the afternoon of 13 November 2024, which was the day before the hearing. This, he says, was the first time in over a year of litigation between the parties that Station Vista took issue with the Tribunal's jurisdiction, and it was not until the hearing, the next day, that Station Vista's objection to the Tribunal's jurisdiction was fully developed.
2. It is not in dispute that the first occasion Station Vista raised the issue as to whether the Tribunal had jurisdiction to entertain ZMU's application was when the written submissions of Station Vista's counsel were served on the solicitors for ZMU the day before the hearing. The jurisdictional issue was not raised in Station Vista's points of defence.
3. Mr Di Lizia also submits that there is a general discretion to award costs with no absolute rule that a successful party be compensated by an unsuccessful party, absent disentitling conduct. Further, in exercising its discretion, it is submitted that the Tribunal is to have regard to the nature of the proceedings before it and all relevant factors arising in connection with those proceedings. In support, Mr Di Lizia cites Rockwall Homes Pty Ltd v Ayoub [2020] NSWCATAP 87 at [25]; Arambewela v Castle Projects Pty Ltd [2018] NSWCATAP 14 at [19]; LMA Contractors Ltd v Changizi [2017] NSWCATAP 145 at [14]. The submission, which is not disputed by Station Vista's counsel, Mr Kauffmann, and which I accept, is also consistent with what the Appeal Panel said in Thompson v Chapman [2016] NSWCATAP 6 at [68 - 72] as to the correct approach in exercising the general costs discretion under Rule 38.
4. In addition, Mr Di Lizia submits that where a party's legal representative keeps or holds back on what might be described as a deadly or fatal point, there is a risk that costs will not be awarded in that party's favour. In support, he cites Green v Schneller [2003] NSWSC 202 at [32] (Green), Zelcliff Pty Ltd v Container Exchange (Qld) Ltd [2022] QSC 329 at [32] and Rhodes v Tower Australia Superannuation Ltd ATF the Tower Superannuation Fund [2004] FCA 812 (Rhodes).
5. Further, Mr Di Lizia submits that the circumstances in the present matter are squarely analogous to the decision of French J (as the Chief Justice then was) in Rhodes.
6. Referring to the guiding principle found in section 36(3) of the CAT Act, Mr Di Lizia asserts that the holding back of a foundational point for over a year, which goes to the Tribunal's jurisdiction, amounted to disentitling conduct.
7. For Station Vista, Mr Kauffmann submits that ZMU was under a duty to ensure that, before filing its application, the Tribunal had jurisdiction and, having entirely failed in its application, that costs should follow the event. Mr Kauffmann contends that ZMU should have been aware of or on notice of the jurisdictional issue as early as 5 September 2023, when Station Vista representatives informed the Tribunal that it was likely that Mr Miqdadi, its director, was not the appropriate party to the dispute, and there may be a jurisdictional issue if he continues as the applicant. ZMU subsequently replaced him as the applicant.
8. Mr Kauffmann also submits that Station Vista's submissions filed and served on 13 November 2024, in which it was contended that the Tribunal did not have jurisdiction, were prepared at a time when Station Vista did not have the benefit of ZMU's written submissions to inform Station Vista's legal representatives as to the basis on which jurisdiction was claimed.
9. Further, Mr Kauffmann submits that had ZMU complied with orders made in December 2023 in relation to the joint preparation of a Tribunal Book and service of submissions, the jurisdictional issue may have been raised earlier. ZMU, says Mr Kauffmann, is refusing to accept responsibility for the role that its own conduct played in the lateness with which Station Vista raised the jurisdictional issue.
10. Mr Kauffmann also rejects the assertion by Mr Di Lizia that Station Vista was holding onto a foundational point going to the Tribunal's jurisdiction. He says that Station Vista's litigation activity is indicative of its belief that there was jurisdiction, as it continued to engage in the litigation process, incurring both the risk and costs of joining Mr Gebara as a third party.
11. Mr Kauffmann also states that information regarding the jurisdictional issue was available to both parties and that Station Vista did not consider the jurisdictional issue throughout the proceedings; it was only discovered less than a week before the hearing during preparation for the hearing. He states that the jurisdictional issue was not certain at the time and required further review of the history of correspondence and the relevant law. He goes on to say that given "the frantic nature of hearing preparations, a party cannot be expected to furnish every half-baked idea to the other side before it is properly considered - that is the purpose of submissions."
12. Mr Kauffmann submits that the decision in Rhodes is distinguishable from the present proceedings.
13. On 8 November 2024, Station Vista's solicitors served what was said to be a Calderbank offer on ZMU's solicitors (Calderbank letter). It is on the basis of this letter and the subsequent conduct on the part of ZMU, including on the day of the hearing, that Station Vista seeks indemnity costs.
14. According to Mr Kauffmann, the sending of the Calderbank letter was an appropriate action by Station Vista, which effectively gave ZMU the opportunity to get out of the proceedings without a cost order, and warned ZMU of the possibility of an indemnity cost order. The letter, which is marked "without prejudice save as to costs" reads as follows:

We note that the Proceedings are listed for final hearing on 14 November 2024.

Given the amount of your client's claim compared to the likely costs of all parties involved to the conclusion of a two-day hearing, we are instructed to make contact to explore settlement alternatives in the interests of all parties.

We are instructed to make the following commercial offer to resolve the abovementioned proceedings:

1. That the hearing is vacated and the Proceedings are dismissed with no order as to costs.

It is preferable that the parties enter into a final deed of release to finalise all matters between them to ensure that no further claims are made in this matter given its long history.

This offer is made within the principles expressed in Calderbank v Calderbank and is capable of acceptance until 4pm, 13 November 2024, after which time it will lapse.

Acceptance of this offer is advantageous to your client as they will avoid the risks and costs associated with litigation and it represents a significant compromise in our client's position.

In the event that your client does not accept this offer and receives a result no more favourable as a result of proceedings, our client will tender this letter to the Tribunal in an application for costs on an indemnity basis from the date of this letter. We estimate such costs to be in excess of $30,000.

1. Mr Kauffmann's submissions also focus on ZMU's conduct following receipt of the Calderbank letter. He says ZMU did not reach out to Station Vista to "open the Offer again", which I take to mean engage in settlement negotiations. That is not what is reflected in the correspondence copies of which are attached to his written submissions. On 12 November 2024, in an email headed "without prejudice save as to costs", ZMU's solicitors informed Station Vista's solicitors that their client was prepared to settle the proceedings on the basis that Station Vista pay ZMU $55,000 within 14 days in full and final settlement of the claim, and the proceedings would be dismissed. On 13 November 2025, in an email marked "without prejudice save as to costs", Station Vista solicitors made an offer, on behalf of their client, to settle ZMU's claim for $15,000, with the proceedings to be dismissed and no order as to costs.
2. None of the correspondence I referred to mentions the Tribunal lacking jurisdiction to determine ZMU's claim.
3. Mr Kauffmann also states in his submissions that the parties engaged in discussions on the day of the hearing, after I had given them the opportunity to settle the matter. He then describes an offer made by Station Vista, which ZMU rejected

1. As can be seen from the respective submissions, there are two issues to be considered in deciding the question of costs. The first issue is whether raising the jurisdictional issue the day before the hearing amounts to disentitling conduct on the part of Station Vista, such that it should be deprived of a cost order. If the answer to the first issue is no, the second issue is whether Station Vista is entitled to an indemnity cost order?

1. There is no dispute that the first time Station Vista raised as a defence that the Tribunal lacked jurisdiction to determine the ZMU claim was when its counsel's written submissions were filed and served on 13 November 2025, the day before the hearing.
2. Mr Di Lizia has referred to a number of decisions where the withholding or raising of an issue at the last minute, which could affect the outcome of proceedings, was taken into account in costs applications. (see paragraph 17 above). I need only refer to two of those decisions.
3. In Rhodes, French J said this at [19]:

In my opinion the discretion to award costs to a successful respondent may be informed by its failure to take a preliminary objection until the very last minute. I would not go so far as to say that it would be appropriate in any but exceptional cases to award costs against such a respondent. However it may be appropriate to refuse the benefit of an order for costs in such a case.

1. His Honour had regard to these factors in refusing a costs order in an appeal from a Tribunal decision:

(1) The Tribunal's authority to hear and determine the application was not challenged before the Tribunal

(2) The question of the Tribunal's authority was not raised until the hearing of the appeal;

(3) The successful party in the proceedings was involved in the superannuation industry and would be expected to have access at a much earlier stage than the hearing of the appeal to advice in relation to the powers of the Tribunal;

(4) Much of the debate in the written and oral submissions at the appeal was wasted in light of the preliminary jurisdictional point that was taken; and

(5) There was no prior notice of the intention of the successful party to raise the jurisdictional issue.

1. In the decision of Green, the plaintiff had, in the course of proceedings, overlooked the need to obtain leave of the Federal Court to continue proceedings against the defendant, who had been made bankrupt. It was necessary for Simpson J to adjourn the proceedings to enable the plaintiff to seek leave. On the question of costs, counsel for the defendant argued that the defendant should be awarded the costs of the day, the oversight being that of the plaintiff's legal representatives. The plaintiff's counsel argued that the oversight must have been obvious to the defendant's legal representatives, and a simple telephone call would have alerted them to the need to take this step in the Federal Court, obviating the need for an appearance and the incurring of costs. On this, Simpson J said the following at [32]-[34]:

32 I accept that it is not the function of the defendant's legal representatives to draw the attention of the plaintiff's legal representatives to an obstacle in their path in pursuit of an application. However, where legal representatives keep to themselves an obvious and deadly point, they run the risk that costs will not be awarded in their favour. Counsel for the defendant said that the point seemed to him so plain that he could only assume that counsel for the plaintiff had come up with an answer to such an obvious point and he therefore did not raise the matter with him.

33 I have found this issue rather difficult. As I have said, it is not for the defendant's counsel, or legal representatives, to advise the plaintiff. On the other hand, as I have also said, failure to raise such a matter puts the party doing so at risk.

34 I have concluded, in the circumstances, that a just result will be to order each party to pay his or her own costs of the hearing on 13 February 2003.

1. I do not consider the decisions in Rhodes or Green to be distinguishable from the present proceedings and to be disregarded simply because the cost decisions turned on the specific facts in those cases. It is the approach taken by the courts that is relevant and instructive in relation to the present costs application. They serve as examples of what constitutes conduct that might disentitle a successful party to a costs order where a foundational or preliminary point should have been taken but was not.
2. Mr Kauffmann submits that ZMU was under a duty to ensure the Tribunal had jurisdiction before filing its application. Perhaps so, however, since Station Vista did not raise the jurisdiction issue until the day before the hearing, I fail to see why ZMU would not be expected to continue with the claim at least until then, on the assumption that the Tribunal's jurisdiction was not being challenged or in dispute.
3. It has not been explained by Mr Kauffmann how Mr Miqdadi being replaced by ZMU as the applicant back in September 2023 should have alerted ZMU to the possibility of the jurisdictional issue that led to the dismissal of the application. Even if there is some tenuous link, which I cannot see, it begs the question as to why that event did not alert Station Vista at the time to a potential jurisdictional issue.
4. An explanation proffered by Mr Kauffmann for the jurisdictional issue being raised for the first time on 13 November 2024 was said to be a failure on the part of ZMU to comply with the Tribunal's directions made on 19 December 2023 for the filing of a joint Tribunal Book and written submissions. The relevant directions required the filing of a joint tender bundle or Tribunal Book and outline submissions no later than seven days prior to the hearing.
5. I am unable to accept Mr Kauffmann's submission that ZMU's failure to comply with a direction made in December 2023, which involved the preparation of the Tribunal Book and the filing of outline submissions, was responsible in any way for the jurisdictional issue only being raised by his client on the day before the hearing.
6. The Tribunal Book includes all relevant documents, including pleadings (points of claim and points of defence) and affidavits. The points of claim filed with the Tribunal on behalf of ZMU are dated 5 October 2023, while Station Vista's points of defence are dated 29 November 2023. Mr Miqdadi's affidavit filed in support of ZMU's application is dated 30 April 2023. The affidavits of Mr Ferizis, Station Vista's sole director, are dated 29 August and 11 October 2024.
7. Apart from Mr Ferizis' October 2024 affidavit, it was well before the hearing that Station Vista had access to all relevant documents, which eventually became part of the Tribunal Book. Despite this, Mr Kauffmann has not explained what further information was needed to understand that there might have been a jurisdictional issue or how ZMU's legal representatives' failure to participate or cooperate in preparing the Tribunal Book prevented Station Vista from raising, identifying, or becoming aware that the Tribunal did not have jurisdiction to hear the ZMU application.
8. Similarly, no explanation has been provided by Mr Kauffmann regarding the connection between ZMU's failure to file written submissions on time and the jurisdictional issue raised on 13 November 2024 for the first time. ZMU's submissions, filed on the day of the hearing, appear to do no more than address the issues for determination raised by the pleadings. It seems likely that the same or similar submissions would have been made if ZMU had complied with the Tribunal's directions of 19 December 2023 for filing outline submissions.
9. Nothing that Mr Kauffmann has submitted adequately explains, in my view, how it came about that Station Vista only raised the jurisdictional issue the day before the hearing. I can only conclude that a "lightbulb moment" occurred within Station Vista's legal team in the course of preparing the week prior to the hearing, which in turn led to the jurisdictional issue being raised in written submissions filed with the Tribunal the day before the hearing.
10. Mr Kauffmann's acknowledgement that Station Vista did not consider the jurisdiction issue throughout the proceedings, and it was only discovered less than a week before the hearing, is telling. These proceedings had been ongoing for some considerable time, and Station Vista had the benefit of all relevant documents for a significant period prior to the hearing. It also had legal representation throughout these proceedings. In my view, when it comes to a jurisdictional challenge, the onus was on Station Vista to take issue with the Tribunal's jurisdiction at the earliest available opportunity, a requirement that is reinforced by the "Guiding Principle" contained in section 36 of the CAT Act, but it failed to do so.
11. The withholding or failure to raise an issue that is central to whether the proceedings continue is a significant factor when exercising discretion in relation to costs (see Rhodes and Green). I am satisfied that Station Vista did not deliberately withhold the jurisdiction issue. Nevertheless, it ought to have been in a position to formulate a view as to whether or not the Tribunal had jurisdiction to determine ZMU's application at the earliest when it filed its points of defence in November 2023. In any event, it was certainly apprised of all relevant documents and therefore had the opportunity and duty to raise that issue well before the day prior to the hearing. Had the issue of jurisdiction been raised as a preliminary point early on in the proceedings, and at least from the time points of defence were filed, the ongoing litigation, which lasted over a year, and the resultant legal costs that have undoubtedly been incurred, could have been avoided.
12. The Tribunal has discretion under Rule 38 when deciding the question of costs. In exercising that discretion, and for the reasons contained in the previous paragraphs, it is my view that, despite being the successful party in these proceedings, Station Vista's failure to raise the jurisdictional issue until the day before the hearing amounts to conduct that disentitles it to the usual costs order. The appropriate order, therefore, is that each party is to pay its own costs of the three applications, the subject of these proceedings.
13. I would add for completeness that even if I had decided to make an order for costs in Station Vista's favour, I would have refused to make an order for indemnity costs. In brief, these are my reasons.
14. In Prestige Homez Pty Ltd v Ghag [2025] NSWCATAP 93, the Appeal Panel observed that the principles regarding Calderbank offers are well-established and had been recently summarised by Richmond J in Harper v Harper (No 2) 2025 NSWSC 360 at [49]- [53]. The following passage from Richmond J's decision is pertinent:

[51] Relevant factors in determining whether the rejection of an offer was unreasonable include (a) the stage of the proceeding at which the offer was received; (b) the time allowed to the offeree to consider the offer; (c) the extent of the compromise offered; (d) the offeree's prospects of success, assessed at the date of the offer; (e) the clarity with which the terms of the offer were expressed; and (f) whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it: Hazeldene's Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298 at [25]; Miwa at [12]; Wheatley at [98]; E Group Security at [59]. A finding of unreasonableness should not be made other than on clear grounds: E Group Security at [58].

1. In my view, the Calderbank letter sent by Station Vista's solicitors to ZMU's solicitors on 8 November 2024 falls short of meeting the essential elements of a Calderbank offer in at least two key respects.
2. The first is that the time allowed to consider the offer was inadequate. The letter was sent on Friday, 8 November 2024, at 11:46 AM and was expressed to be open until 4 PM on 13 November 2024. The offer was only open for acceptance for five days. That was, in my opinion, insufficient time for ZMU to consider the offer.
3. Second, the Calderbank letter makes no mention of the jurisdictional issue or, for that matter, any legal basis that would enable ZMU to properly consider and assess its prospects of success. Indeed, the only justification for the offer expressed in the letter is to avoid the cost of a two-day hearing. As to the strengths and weaknesses of the respective parties' legal positions, the letter was completely silent
4. The Calderbank letter did not meet the threshold requirements for a Calderbank offer, and therefore, had I been required to decide the question of whether it was appropriate to award indemnity costs, I would have found the failure on the part of ZMU to accept the offer contained in the Calderbank letter was not unreasonable.
5. The subsequent offer and counter-offer made by the parties and the settlement negotiations that took place outside the hearing room on the day of the hearing have no bearing, in my view, on whether the Calderbank letter was effective.

(1) A hearing on costs is dispensed with pursuant to section 50(2) of the Civil and Administrative Tribunal Act, 2013.

(2) Each party is to pay its own costs of the three applications, the subject of these proceedings.

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.