Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Tang v Mawad Group Pty Ltd [2021] NSWCATAP 282 Hearing dates: 10 May 2021 Date of orders: 20 September 2021 Decision date: 20 September 2021 Jurisdiction: Appeal Panel Before: K Ransome, Senior Member S Goodman SC, Senior Member Decision: 1. The appeal is dismissed. 2. The respondent's application to vary order numbered 5 made on 16 March 2021 is dismissed. 3. If either party wishes to make submissions as to costs of: (1) this appeal incurred since 16 March 2021, or (2) the application to vary the 16 March 2021 Costs Order: (a) that party ("moving party") is to provide written submissions, not exceeding 5 pages, to the Appeal Panel and other party within 2 weeks of the date of these Orders and is to indicate in those submissions whether it consents to costs being determined on the papers pursuant to section 50 of the Civil and Administrative Tribunal Act; (b) the other party is to provide written submissions in response, not exceeding 5 pages, to the Appeal Panel and the moving party within 4 weeks of the date of these Orders and is to indicate in those submissions whether it consents to costs being determined on the papers pursuant to section 50 of the Civil and Administrative Tribunal Act; (c) the moving party is to provide any written submissions in reply, not exceeding 2 pages, to the Appeal Panel and the other party within 5 weeks of the date of these Orders. 4.The stay order made on 13 January 2021 is lifted. Catchwords: APPEAL – appeal from exercise of discretion fixing the amount of costs to be paid - acting on a wrong principle - failure to consider relevant considerations – unreasonableness - adequacy of reasons – indemnity costs Legislation Cited: Civil and Administrative Tribunal Act 2013 Cases Cited: 203 Castlereagh Street Pty Ltd v Skybloo Holdings Pty Ltd [2017] NSWCATAP 29 Australian and New Zealand Banking Group Limited [2016] NSWSC 833 B & L Linings Pty Ltd v Chief Commissioner of Estate Revenue (No. 6) (RD) [2012] NSWADTAP 26 Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No. 2) [2009] NSWCA 12 Gautam v Health Care Complaints Commission Global Abode Pty Ltd v Podgoetsky [2021] NSWCATAP 77 Hamod v State of New South Wales and Anor [2011] NSWCA 375 House v R (1936) 55 CLR 499 In the matter of K & K Property Solutions Ltd [2018] NSWSC 293 Leichhardt Municipal Council v Green [2004] NSWCA 341 Lo v Chief Commissioner of State Revenue [2013] NSWCA 180; (2013) 85 NSWLR 86 Mendonca v Tonna [2017] NSWCATAP 176 New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231; (2019) 100 NSWLR 578 Oshlack v Richmond River Council (1998) 193 CLR 72 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Wainohu v New South Wales (2011) 243 CLR 181 Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 Category: Principal judgment Parties: Yi Min Tang (First Appellant) Sima Podgoetsky (Second Appellant) Mawad Group Pty Ltd (Respondent) Representation: Counsel: E Chrysostomou (Respondent) Solicitors: Keystone Lawyers (Appellants) Reuben George Lawyers (Respondent) File Number(s): 2020/00371261 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Citation: N/A Date of Decision: 18 November 2020 Before: DAC Robertson, Senior Member REASONS FOR DECISION Introduction 1. The appellants ("owners") engaged the respondent ("builder") to undertake building works on a property at North Bondi. 2. In September 2019, the builder commenced proceedings in the Tribunal against the owner. 3. On 10 August 2020, at the commencement of the final hearing of the builder's application, the Tribunal acceded to an application by the owners to transfer the builder's proceedings, together with proceedings that the owners had commenced in late July 2020 for an amount exceeding the Tribunal's jurisdiction, to the Supreme Court of New South Wales. 4. The orders made by the Tribunal on that day included an order that the owners pay the builder's costs "thrown away by reason of the transfer, including the costs of preparing for today's hearing, such costs to be determined by the Tribunal on the papers and without a further hearing on the basis of further submissions to be filed ..."; and directions for the filing and service of evidence and submissions concerning the costs incurred by the builder. 5. Following the receipt of evidence and submissions on the question of costs, on 18 November 2020 the Tribunal made an order requiring the owners to pay $23,529 to the builder ("Gross Sum Costs Order") and published Reasons for Decision ("Reasons"). 6. On 16 December 2020, the owners filed a Notice of Appeal. 7. On 16 March 2021, at the first hearing of the appeal, the owners sought and were granted leave to amend their Notice of Appeal. The Appeal Panel (differently constituted) ordered that: 1. the owners have leave to file an Amended Notice of Appeal limited to the following two grounds of law: 1. the miscarriage by the Tribunal in the exercise of its discretion in determining that there be a gross sum costs order within the principles of House v R (1936) 55 CLR 499; 2. the adequacy of the reasons for determining that there be a gross sum costs order; 1. the hearing of the appeal be adjourned; 2. the owners pay the builder's costs of the appeal to date including the builder's costs of the hearing on 16 March 2021, as agreed or assessed ("16 March 2021 Costs Order"); 3. the builder have leave to seek a variation of the 16 March 2021 Costs Order, to the effect that the owners pay the builder's costs on an indemnity basis. 1. On 23 March 2021, the owners filed an Amended Notice of Appeal. The hearing of the appeal resumed on 10 May 2021. 2. These Reasons address the owners' appeal and the builder's application to vary the 16 March 2021 Costs Order, so that the costs are payable an indemnity basis. The owners' appeal 1. The decision to make the Gross Sum Costs Order is an "ancillary decision" within s 4(1) of the Civil and Administrative Tribunal Act 2013 ("NCAT Act"). To succeed in their appeal the owners must demonstrate that the Tribunal made an error of law, or that it is appropriate to grant leave to review the decision on other grounds: s 80(2)(b) of the NCAT Act. 2. As noted above, the orders made on 16 March 2021 limited the grounds of appeal to the two grounds described at paragraph [7(1)] above. The Decision 1. In the Reasons, the Tribunal: 1. noted the events leading up to and including the order and directions made on 10 August 2020 (Reasons [1]-[18]); 2. noted that the builder sought costs in the sum of $46,108.83 plus GST (Reasons [9]); 3. recorded the essence of the owners' submissions including that the Tribunal could still choose not to make a gross sum costs order, but if the Tribunal were minded to make such an order, then there should be various deductions from the amount sought by the builder and the amount awarded should be $11,438.16 (Reasons [11]); 4. declined to vary the order it had made on 10 August 2020 on the basis that: "I am satisfied that I am able, on the material provided to me, to make a fair assessment of the costs thrown away and will proceed to do so" (Reasons [12]); 5. acknowledged the statements of the Appeal Panel in 203 Castlereagh Street Pty Ltd v Skybloo Holdings Pty Ltd [2017] NSWCATAP 29 at [39]-[40] and [45] and Black J in In the matter of K & K Property Solutions Ltd [2018] NSWSC 293 at [6] as to the principles applicable to the making of gross sum costs orders (Reasons [15]-[16]); and 6. undertook a detailed examination of the amounts claimed by the builder as counsel and solicitor's fees (Reasons [20]-[45]) and arrived at a total figure of $23,529, with no amount referable to GST (Reasons [47]). That figure included the application of a 30 per cent discount to the amount claimed as solicitors' costs (Reasons [43]). First ground of appeal: miscarriage of the exercise of discretion 1. The first ground of appeal is that the Tribunal miscarried in the exercise of its discretion in determining that there be a gross sum costs order within the principles of House v R (1936) 55 CLR 499. In House v R, Dixon, Evatt and McTiernan JJ stated at 504-505: "The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution, for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred." 1. The owners have submitted that the Tribunal: (1) acted on a wrong principle; and (2) did not take into account a material consideration. They have also submitted that that the Tribunal's decision is unreasonable or plainly unjust. These submissions are dealt with in turn below. Acting on a wrong principle Submissions 1. The owners submitted that the Tribunal failed to act in accordance with the principles set out by the Appeal Panel in 203 Castlereagh Street and in particular that the Tribunal failed to apply a principle that a gross sum costs order should only be made when the determination is comparatively simple. 2. The owners relied upon the decision in B & L Linings Pty Ltd v Chief Commissioner of Estate Revenue (No. 6) (RD) [2012] NSWADTAP 26, in which case the Appeal Panel declined to make a gross sum costs order and instead made an order for payment of costs as agreed or assessed, and indicated at [115] its view that the Tribunal should only make a gross sum costs order where the determination of costs is comparatively simple. 3. The owners also relied upon the decision of the Appeal Panel in Global Abode Pty Ltd v Podgoetsky [2021] NSWCATAP 77, in which the Appeal Panel held at [23]: We are, however, not persuaded that it is appropriate to make a fixed sum costs order. Although the sum of costs in question is relatively modest, we consider that we are not in a position to act fairly between the parties in making a fixed sum costs order on the materials which have been made available by Mr Podgoetsky. We are not able to judge if the amount claimed is reasonable in the circumstances. In particular, there is no evidence of the kind adverted to in Skybloo of the rates which other lawyers charge for work of this nature or the amount likely to be recoverable on assessment if that took place. 1. The builder submitted the Tribunal's discretion is broad, but even if it were confined to comparatively simple cases, the present case is such a case involving only an assessment of costs thrown away by the late filing of the owners' cross application. Consideration 1. The discretion to award costs is a broad discretion. Contrary to the owners' submissions, the discretion to make a gross sum costs order is not to be exercised only in simple cases. So much is clear from the recitation of the applicable principles summarised in 203 Castlereagh Street at [39]-[40] and [45], to which the Tribunal referred at Reasons [15]. 2. Indeed, and as the owners pointed out in their reply submissions, complexity is itself a matter which may persuade a Court or Tribunal to make a gross sum costs order. In Hamod v State of New South Wales and Anor [2011] NSWCA 375 at [817], Beazley JA (Giles and Whealy JJA agreeing) stated: The exercise of the power [to make a gross sum costs order] is particularly appropriate where the costs have been incurred in lengthy or complex cases and it is desirable to avoid the expense, delay and aggravation likely to be involved in contested costs assessment. This may arise either from the likely length and complexity of the assessment process: Beach Petroleum NL v Johnson (No 2) at 120; Charlick Trading Pty Ltd v Australian National Railways Commission ; Australasian Performing Rights Association Ltd v Marlin [1999] FCA 1006; or from the likelihood that the additional costs of formal assessment would disadvantage the successful party because of the likely inability of the unsuccessful party to discharge the costs liability in any event: Harrison v Schipp; Sony Entertainment (Aust) Ltd v Smith (2005) 215 ALR 788 at [90], [194]-[195]; Hadid v Lenfest Communications Inc [2000] FCA 628. 1. The decision in Global Abode Pty Ltd v Podgoetsky turns on its own facts. It does not stand for the proposition that in each case the absence of a particular type of information precludes the Tribunal from forming a (objectively reasonable) view that it is in a position on the material before it to fairly make a determination on a gross costs sum basis. 2. Thus, this ground of appeal fails. In any event, if the discretion were confined in the manner contended for by the owners, there would still have been no error on the part of the Tribunal. The costs determination undertaken by the Tribunal was a simple determination of the costs thrown away as a result of the owners filing a cross application shortly prior to the hearing date. Failure to take into account a material consideration Submissions 1. The owners submitted that the Tribunal failed to take into account: 1. correspondence from the owners to the builder which invited the builder to consent to the transfer of the proceedings to the Supreme Court; and the builder's refusal to provide such consent; and 2. the fact that the builder failed to provide evidence as to which solicitors performed the work and the experience and hourly rates of those solicitors. 1. The builder submitted: 1. as to the owners' first point, that: 1. the Tribunal expressly referred to these matters at Reasons [14] and concluded that the builder was fully entitled to resist any application which would have vacated the hearing and caused further delays; 2. the owners' complaint is misconceived because it ignores that procedural orders of the Tribunal were made fixing the matter for hearing, for the transfer application to be considered at the hearing and that the parties were to be ready to proceed at the hearing on the basis that the transfer would be refused; and the owners are cavilling with interlocutory orders which are not the subject of an appeal; 1. as to the owners' second point: 1. the Tribunal at Reasons [36]-[37] correctly applied a "broad brush" approach to the assessment of costs and in doing so accepted the owners' submissions to exclude broad categories of costs; and 2. in any event, a failure to provide a breakdown of time spent is not fatal to an application for a gross sum costs order, citing Australian and New Zealand Banking Group Limited [2016] NSWSC 833 at [26]. Consideration 1. As noted above, the orders made by the Tribunal on 10 August 2020 included an order that the owners pay the builder's costs "thrown away by reason of the transfer, including the costs of preparing for today's hearing, such costs to be determined by the Tribunal on the papers and without a further hearing on the basis of further submissions to be filed ...". By this order, the Tribunal made a decision, pursuant to s 60 of the NCAT Act that the owners were to pay the builder's costs thrown away. It was open to the Tribunal to vary that decision if it was not satisfied that the evidence filed in accordance with its directions enabled it to fairly assess the quantum of those costs. 2. The decision the subject of this appeal was a subsequent decision made in the exercise of the Tribunal's discretion under s 60(4)(a) to determine "to what extent costs are to be paid". 3. The essence of the builder's submission is that in making that decision, the Tribunal failed to take into account relevant considerations, namely those set out at paragraph 23 above. However, to qualify as a relevant, or mandatory, consideration, the matter not considered must be one which the decision-maker was bound to take into account, such obligation arising from the express terms of the statute or implied from its subject matter, scope and purpose: see Lo v Chief Commissioner of State Revenue [2013] NSWCA 180; (2013) 85 NSWLR 86 at [9]. 4. Section 60(4)(a) of the NCAT Act is expressed in broad terms and does not identify particular matters that may or must be taken into account or not taken into account in the exercise of this discretion. More particularly, there is nothing in the express terms of the NCAT Act, or arising by implication from its subject matter, scope or purpose, which leads to a conclusion that the Tribunal was bound to take into account the matters set out at paragraph 23 above. 5. In any event, it is not apparent that the Tribunal failed to take those matters into account. 6. It follows that this ground of appeal fails. An unreasonable or plainly unjust decision Submissions 1. The owners rely upon the above grounds in support of their submission that the Tribunal's decision was unreasonable or plainly unjust. 2. The owners have also submitted that the Tribunal's decision was unreasonable or plainly unjust because the Tribunal did not have a sufficient basis from which to arrive at an appropriate sum that would be fair to the parties. 3. The builder relied upon its submissions with respect to the earlier grounds and in response to the owners' submission that the Tribunal did not have a sufficient basis from which to arrive at an appropriate sum that would be fair to the parties, the builder submitted that the owners' submissions were inconsistent with a concession that the owners had made on 16 March 2021 that the quantum of the Gross Sum Costs Order would not be challenged. Consideration 1. For the reasons set out above, the earlier grounds fail and provide no support for the proposition that the decision was unreasonable or unjust. 2. The owners' submission that the Tribunal did not have a sufficient basis from which to arrive at an appropriate sum that would be fair to the parties is rejected. Whilst the power to make a gross sum costs order should only be exercised when the Tribunal considers that it can do so fairly between the parties, in the present case, the determination to be made was the quantum of costs thrown away, and the material provided by the parties to the Tribunal pursuant to the directions that it made was sufficient to allow such a determination to occur. 3. Whilst the owners emphasised that the builder's evidence did not identify which solicitors performed the work and the experience and hourly rates of those solicitors, these matters were taken into account by the Tribunal (Reasons [35]) and as the Tribunal acknowledged at Reasons [36], it was entitled to take a broad brush approach to the determination of costs. Further, as the builder submitted, a failure to provide particular detail is not fatal to an application for a gross sum costs order: see Australian and New Zealand Banking Group Limited. 4. In these circumstances, the Appeal Panel sees no error in the approach taken by the Tribunal, let alone an error of sufficient magnitude to allow the decision to be described as unreasonable or plainly unjust. Second ground of appeal: inadequacy of reasons 1. The second ground of appeal is that the Tribunal's reasons for determining that there be a Gross Sum Costs Order were inadequate. It is well settled that a failure to provide adequate reasons is an error of law: Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13]. Submissions 1. The owners' submissions may be summarised as follows: 1. a decision-maker is under a general duty to provide reasons for his or her decision; 2. the decision in 203 Castlereagh Street sets out a series of criteria or principles as to when a gross sum costs order may be appropriate; 3. the Tribunal did not provide reasons as to: 1. how and why consideration was given to the "test" set out in 203 Castlereagh Street, particularly in view of the Tribunal's findings at Reasons [35] that the builder's evidence did not include information as to which solicitors performed the work, the experience of those solicitors or their hourly rates, which suggest that a gross sum costs order was inappropriate; and 2. why a gross sum costs order was appropriate. 1. The builder's submissions may be summarised as follows: 1. the nature and extent of the reasons required are variable and depend upon the circumstances of the particular case; 2. in considering whether reasons are inadequate, it is necessary to consider those reasons as a whole, and reasons may appear by inference from what has been expressly stated; 3. in the present case a necessary inference was that the Tribunal had particular regard to the factors related to s 36(1) of the NCAT Act; 4. the Tribunal considered the factors described in 203 Castlereagh Street and stated: "I am satisfied that I am able, on the material provided to me, to make a fair assessment of the costs thrown away and will proceed to do so" (Reasons [12]); 5. there was no inadequacy of reasons, but even if there was, no different result would follow because: 1. the owners have not established that it would have made any difference to the exercise of the discretion; 2. the Appeal Panel should exercise its power under s 80(3) of the NCAT Act and reach the conclusion that a gross sum costs order is appropriate. 1. In reply, the owners submitted that the outcome would have been vastly different if the Tribunal had applied the correct principle because there would have been an assessment of costs, rather than the Gross Sum Costs Order. Consideration 1. The extent of the obligation to give reasons is not fixed and varies from matter to matter taking into account factors such as the nature of the jurisdiction being exercised; the particular matter the subject of the decision; the significance of the issues determined by the Tribunal both for the parties and for the broader public; and the nature of the submissions made by the parties: see Wainohu v New South Wales (2011) 243 CLR 181 at [56] per French CJ and Kiefel J; New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231; (2019) 100 NSWLR 578 at [65]–[77] per Bell P; and Gautam v Health Care Complaints Commission [2021] NSWCA 85 at [14]–[18] per Leeming JA. 2. In the present case, the Reasons involved a determination of the quantum of costs and not a decision to make a gross sum costs order. Importantly, the decision to make a gross sum costs order had already been made on 10 August 2020. That order was in the following form: "The Tribunal orders that the applicant pays the respondent's costs thrown away by reason of the transfer, including the costs of preparing for today's hearing, such costs to be determined by the Tribunal on the papers and without a further hearing on the basis of further submissions to be filed in accordance with the following directions." 1. It is clear from this order that the matter for determination on the papers was the quantum of the costs to be paid by the owners. There was no appeal from the order made on 10 August 2020. Instead, the owners sought in their submissions to have the Tribunal vary that order. The Tribunal dealt with that application at Reasons [12]: "I do not consider it necessary to give substantial consideration to the home owners' application to vary the costs order made on 10 August 2020. Although the home owners may be correct in submitting that I am not functus officio and have jurisdiction, if appropriate, to vary the orders made on 10 August 2020, I see no reason to do so, I am satisfied that I am able, on the material provided to me, to make a fair assessment of the costs thrown away and will proceed to do so." (emphasis in underline added) 1. In these circumstances, the Tribunal was not required to explain in its Reasons as to why it decided to make a gross sum costs order and this ground of appeal fails. 2. The owners did not contend that this ground of appeal might be construed as a failure to give reasons on the owners' application to vary the costs order made on 10 August 2020. In any event, such a ground would have failed. The Tribunal gave a reason for refusing the variation application, namely that it was satisfied that the material available to enabled it to make a fair assessment of the costs thrown away (Reasons [12]). That reasoning was sufficient in the context of the exercise of a costs discretion and where the Tribunal had previously decided to make a gross sum costs order. 3. For all of the above reasons, the appeal should be dismissed. The builder's application to vary the 16 March 2021 Costs Order 1. As noted above, the orders made by the Appeal Panel on 16 March 2021 included a grant of leave to the builder to seek a variation of the 16 March 2021 Costs Order so that the costs payable under that order were to be paid on an indemnity basis. Submissions 1. The builder submitted that the costs payable under the 16 March 2021 Costs Order should be payable on an indemnity basis for two reasons. 2. The first reason is that: 1. the conduct of the owners amounted to a "relevant delinquency" (an expression used in Oshlack v Richmond River Council (1998) 193 CLR 72 at 89) because that conduct caused delay and wasted costs related to: 1. the appeal grounds in the Notice of Appeal all of which were abandoned by the owners; 2. the written submissions addressing those grounds of appeal; 3. the consideration of more than 300 pages of material of no relevance to the new grounds of appeal, all of which occurred in a context in which the deficiencies in the Notice of Appeal were pointed out by the builder to the owners in the builder's written submissions dated 10 February 2021, but no application to amend the Notice of Appeal was made until the hearing on 16 March 2021. 1. The second reason is that prior to the amendment of the Notice of Appeal the owners were prosecuting proceedings with no reasonable prospects of success (relying upon Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No. 2) [2009] NSWCA 12 at [4]). 2. The owners' submissions may be summarised as follows: 1. indemnity costs should only be made in exceptional circumstances and caution should be exercised in making such an order (relying upon Mendonca v Tonna [2017] NSWCATAP 176 at [59] and the authorities there cited); 2. mere weakness of an arguable case is insufficient to warrant an exercise of the discretion to award indemnity costs: (citing Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 542); 3. a party seeking an indemnity costs order must demonstrate a level of unreasonableness in the conduct of the other party throughout the course of proceedings (citing Leichhardt Municipal Council v Green [2004] NSWCA 341 at [51], [57]); 4. the mere act of seeking to amend a Notice of Appeal, even if this causes delay, is not an act of delinquency requiring an award of indemnity costs; 5. the amendment did not amount to an abandonment of the original grounds of appeal; 6. the new grounds of appeal had already been the subject of written submissions and in particular: 1. the first ground of appeal was included in paragraphs 28 to 32 of the owners' 27 January 2021 submissions; 2. the second ground of appeal was addressed in paragraphs 27 and 29 of the owners' 27 January 2021 submissions; and 1. the folder of 'Appellants Evidence' was material before the Tribunal relevant to the appeal which caused no prejudice to the builder by way of additional costs or delay. Consideration 1. In Mendonca v Tonna, the Appeal Panel set out the principles applicable to the award of indemnity costs, observing at [59]-[60]: 59 Indemnity costs are only awarded in limited circumstances. The discretion to do so must be the subject of careful reasoning (Degmam Pty Ltd (In Liq) v Wright (No 2) [1983] 2 NSWLR 354) and caution should be exercised in making such an award: Leichhardt Municipal Council v Green [2004] NSWCA 341; Ng v Chong [2005] NSWSC 385 at [13]. 60 Other than in relation to the unreasonable refusal of a genuine offer of settlement, one circumstance in which indemnity costs may be awarded is when a case is commenced or continued where there is no chance of success (Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No 2) [2009] NSWCA 12 at [4]), such as where the claim is "without substance", "groundless", "fanciful or hopeless" or so weak as to be futile, such as where a limitation period is obviously at an end: Hillebrand v Penrith Council [2000] NSWSC 1058. However, mere weakness of a case will not be sufficient to warrant an exercise of the discretion to award indemnity costs: Wentworth v Rogers (No 5) (1986) 6 NSWLR 534. … 1. The 16 March 2021 Costs Order was an order that the owners pay the builder's costs of the appeal to that date including the builder's costs of the hearing on that date, as agreed or assessed. 2. Thus it is necessary to consider the conduct of the appeal between the date of its commencement (16 December 2020) and 16 March 2021. 3. On 16 December 2020, the owners filed the Notice of Appeal, together with submissions in support of the appeal. The Notice of Appeal identified six Grounds of appeal and that the owners sought leave to appeal on the basis of the attached submissions. 4. The six grounds of appeal were stated as follows: 1. The Owners gave notice of their intention to make an application to transfer the proceedings to the NSW Supreme Court ("transfer application") at the first available opportunity. 2. It was reasonably foreseeable that the transfer application would be successful. 3. The Owner's request to have the transfer application heard prior to the hearing was unreasonable (sic) refused by the Builder. 4. It is not fair and equitable that the Owners are ordered to pay the Builder's costs of the transfer application given the Builder should have consented to the application. 5. The decision was against the weight of evidence. 6. The Order constitutes a substantial miscarriage of justice. 1. On 8 January 2021, the builder filed a reply to Appeal, with attached submissions. Those submissions included submissions that the first four grounds of appeal did not raise questions of law, but the fifth and sixth grounds did raise such questions. 2. On 15 January 2021, the appeal was set down for hearing on 16 March 2021. 3. On 27 January 2021, the owners filed submissions responsive to the builder's submissions of 8 January 2021, together with a bundle of evidence in support of the appeal. The owners' submissions included various submissions on questions of law and, relevantly, submitted that the Tribunal: failed to provide adequate reasons; identified the wrong issues and the wrong question in making a gross sum costs order and acted upon a wrong principle of law by failing to give consideration to the principles in 203 Castlereagh Street; and made a decision that was so unreasonable that no reasonable decision-maker make it. 4. On 10 February 2021, the builder filed submissions responsive to the owners' submissions of 27 January 2021. The builder's submissions included submissions that all six grounds in the notice of appeal did not raise questions of law and were not stated with sufficient precision so as to provide the builder with notice of the subject matter of the appeal. This involved a departure from builder's earlier submissions in which it had accepted that grounds five and six raised questions of law. 5. As noted above, on 16 March 2021, at the hearing of the appeal, the owners sought and were granted leave to amend the Notice of Appeal, such leave being limited to the two grounds of appeal described at paragraph [7(1)] above, and the Appeal Panel made the 16 March 2021 Costs Order. 6. The 16 March 2021 Costs Order requires the owners to pay the builder's costs up to and including 16 March 2021, regardless of the outcome of the appeal. In other words, even if the owners were to succeed on the appeal, they would not only be unable to recover their costs from the builder for the period up to and including 16 March 2021, but would also be required to pay the builder's costs for that period. 7. The issue requiring determination is whether that costs order should be varied so that the costs are paid on an indemnity basis. 8. In summary, the background set out above indicates that the bases of the owners' appeal, as reflected in their 27 January 2021 submissions, were not adequately set out in their Notice of Appeal. It appears that the Appeal Panel on 16 March 2021 granted leave to the owners to amend their Notice of Appeal so as to pursue grounds which had previously been raised but which were not adequately described in the Notice of Appeal. 9. Whilst ideally the Notice of Appeal would have properly reflected the basis of the owners' appeal from the date of its filing on 16 December 2020, the fact that it required amendment and the consequent vacation of the hearing date is not a matter which amounts to a "relevant delinquency" sufficient to justify an order of costs on an indemnity basis. This is particularly so when the costs order made by the Appeal Panel had the effect of providing the builder with an award of costs of the appeal up to and including 16 March 2021, regardless of the outcome of the appeal; when the builder initially accepted that grounds five and six raised questions of law; and when not all of the work undertaken by the builder's legal representatives up to 16 March 2021 was wasted, given that the grounds for which the Appeal Panel gave leave were raised in the owners' submissions dated 27 January 2021. 10. Further, the fact that the builder's submissions dated 10 February 2021 contained submissions to the effect that no questions of law were raised is not a basis for an order of indemnity costs, particularly when there is no evidence that the builder foreshadowed to the owners that it would seek such an order. 11. The fact that a bundle of evidence was served containing documents not ultimately relied upon is not a sufficient basis for an award of indemnity costs with respect to time spent on that bundle, let alone more generally. 12. Nor can it be said the owners were prosecuting an appeal that had no reasonable prospects of success. In circumstances where:(1) the owners' submissions raised questions of law; (2) the builder initially accepted that grounds five and six raised questions of law; and (3) the matters raised by the owners were not on their face without prospects of success, the Appeal Panel is not satisfied that the appeal had no reasonable prospects of success. It may have been weak, but that is insufficient to ground an order for indemnity costs: see Mendonca v Tonna at [60]. 13. For all of the above reasons, there should be no variation to the 16 March 2021 Costs Order. Orders 1. The orders of the Appeal Panel are: 1. The appeal is dismissed. 2. The respondent's application to vary order numbered 5 made on 16 March 2021 is dismissed. 3. If either party wishes to make submissions as to costs of: (1) this appeal incurred since 16 March 2021, or (2) the application to vary the 16 March 2021 Costs Order: 1. that party ("moving party") is to provide written submissions, not exceeding 5 pages, to the Appeal Panel and other party within 2 weeks of the date of these Orders and is to indicate in those submissions whether it consents to costs being determined on the papers pursuant to section 50 of the Civil and Administrative Tribunal Act; 2. the other party is to provide written submissions in response, not exceeding 5 pages, to the Appeal Panel and the moving party within 4 weeks of the date of these Orders and is to indicate in those submissions whether it consents to costs being determined on the papers pursuant to section 50 of the Civil and Administrative Tribunal Act; 3. the moving party is to provide any written submissions in reply, not exceeding 2 pages, to the Appeal Panel and the other party within 5 weeks of the date of these Orders. 1. The stay order made on 13 January 2021 is lifted. ********** 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: 20 September 2021