Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Chen v Metrix Development Pty Ltd [2021] NSWCATCD 87 Hearing dates: On the Papers Date of orders: 12 August 2021 Decision date: 12 August 2021 Jurisdiction: Consumer and Commercial Division Before: G Kinsey, General Member Decision: (1) An oral hearing on costs is dispensed with under s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW). (2) Each party in the proceedings in the Tribunal is to pay the party's own costs. (3) The application for costs by the Respondents is dismissed. Catchwords: COSTS — Whether special circumstances exist pursuant to section 60 of the Civil and Administrative Tribunal Act 2013 — No special circumstances exist-application for costs dismissed — No order as to costs Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 (NSW) Cases Cited: Allen v TriCare (Hastings) Ltd [2017] NSWCATAP] 25 Nguyen v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen[2015] NSWCATAP 264 Texts Cited: Nil Category: Costs Parties: Hong Yan Chen (First Applicant) Wei Dong Liang (Second Applicant) Metrix Development Pty Ltd (First Respondent) Anthony Metledge (Second Respondent) Lauren Metledge (Third Respondent) Representation: Solicitors: Baldock Stacy & Niven Solicitors (Applicants) Mary Metledge Solicitor (Respondents) File Number(s): RT 21/14135 Publication restriction: Nil REASONS FOR DECISION APPLICATION 1. This is an application for costs by the Respondents (Metrix Development Pty Ltd, Anthony Metledge and Lauren Metledge) following the withdrawal of proceedings in matter RT 21/14135. The Respondents were tenants of a property in Orchards Avenue Breakfast Point ("the Premises") For the sake of convenience the Respondents shall hereinafter be referred to as "the Tenants". 2. The Applicants (Hong Yan Chen and Wei Dong Liang) in matter RT 21/14135 were the Landlords of the property. The Landlords filed an application on 29 March 2021 seeking orders for termination of the residential tenancy under section 85 of the Residential Tenancies Act 2010 and payment of the rental bond ("the Application"). For the sake of convenience the Applicants shall hereinafter be referred to as "the Landlords". 3. On 3 May 2021 the Application was listed for conciliation and directions. At the hearing both parties were given leave to be legally represented and directions were made for the filing and service of evidence. BACKGROUND 1. It is convenient to set out the history of the tenancy. 2. The Landlords and the Tenants entered into a residential tenancy agreement for the Premises on or about 15 April 2019. The term of the agreement was 12 months commencing on 15 April 2019 and ending on 14 April 2020. 3. At the end of the fixed term the Tenants remained in the Premises. 4. The Landlords served the Tenants with 3 Notices of Termination: 1. Notice of Termination dated 17 November 2020 under section 85 of the Residential Tenancies Act 2010 ("the Act"). The notice required the Tenants to give vacant possession on 15 February 2021. ("the first NOT") 2. Notice of Termination dated 15 January 2021 under section 87 of the Act for non-payment of rent. The notice required the Tenants to give vacant possession on 29 January 2021 ("the second NOT"); 3. Notice of Termination dated 16 February 2021 under section 86 of the Act on the grounds that the Premises had been sold. The Notice required the Tenants to give vacant possession on 18 March 2021. ("the third NOT") 1. The Landlords filed an application for termination and possession relying on the second NOT. That application was listed before the Tribunal on 30 March 2021 (File no: RT 21/07816). 2. On 29 March 2021 the Landlords filed an application for an order for termination and possession relying on the first NOT (File No: RT 21/14135). The application was listed for directions on 3 May 2021. 3. On 30 March 2021 the Tribunal made orders in respect of RT 21/07816 including an order that the residential tenancy agreement was terminated and the date for vacant possession suspended until 14 April 2021. The order for termination was made pursuant to section 87 of the Act. 4. The Tenants filed an appeal on 7 April 2021 to have the orders made on 30 March 2021 in RT 21/07816 set aside. 5. On 3 May 2021 the application RT 21/14135 was listed for a formal hearing and directions were made for the filing and service of evidence. The Application was fixed for a final hearing on 24 May 2021. 6. On 18 May 2021 the Appeal Panel dismissed the Tenants' appeal in respect of the orders made in RT 21/07816 ( Appeal Panel Case Reference: [2021] NSWCATAP 143) 7. On 19 May 2021 the Landlords withdrew their Application RT 21/ 14135. 8. On 21 May 2021 the Tribunal dismissed Application RT21/14135 in accordance with section 55(1)(a) of the Civil and Administrative Tribunal Act 2013. TENANTS' SUBMISSIONS 1. The Tenants submit they are entitled to an award of costs because "The Landlords unreasonably made a second application seeking a Termination Order in circumstances where a Termination Order was already made on 30 March 2021" and " The 2nd Application ought not to have been commenced in the first place and once brought, ought to have been withdrawn at a much earlier time than the weekend prior to the listed date for Hearing, when no great expense had been incurred." 2. The Tenants submit that "the 2nd Application was simply an attempt to re-agitate matters, which had already been considered in the 1st Application (which resulted in essentially the same result as that sought in the 2nd Application)." LANDLORDS' SUBMISSIONS 1. The Landlords oppose the making an order for costs and submit it is not appropriate to make an order for costs in the circumstances. 2. The Landlords submit that under section 60(1) of the Civil and Administrative Tribunal Act 2013 (NSW) ("the NCAT Act") "each party to the proceedings is to pay the party's own costs". 3. Under section 60(2) of the NCAT Act, the Tribunal may award costs "only if it is satisfied that there are special circumstances warranting an award of costs". 4. The Landlords submit that Rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) does not apply as the claim is not over $30,000. 5. The Landlords submit that the only avenue available to the Tenants for an award of costs is section 60 of the NCAT Act. They contend that there are no special circumstances which warrant an award of costs. The Landlords' submissions address each of the matters referred to in section 60(3) which the Tribunal must consider when determining if there are special circumstances. TENANTS' SUBMISSIONS IN REPLY 1. The Tenants submit they incurred unnecessary legal costs to defend a matter which had already been agitated in the Landlords' first application for an order for termination. 2. The submission addresses each of the matters in section 60(3) and argues there are special circumstances to warrant an award of costs. 3. The Tenants submit that the Landlords rejection of the Calderbank offers made by them was unreasonable. HEARING ON THE PAPERS 1. The parties provided written submissions on the issue of costs in accordance with directions made by the Tribunal on 10 June 2021. Both parties were given the opportunity to address in those submissions whether a further oral hearing was sought regarding the costs application and neither party sought an oral hearing. 2. Both parties consented to the costs application being determined on the papers. The Tribunal is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering the written submissions provided by them. Accordingly the Tribunal dispenses with the oral hearing under section 50(2) of the NCAT Act. 3. The Tribunal read and considered the submissions of both parties on the issue of costs. Those submissions were received in a hardcopy format and by email. CONSIDERATION The Law 1. The Tribunal is empowered, pursuant to section 60 of the NCAT Act to award costs. Pursuant to section 60(1) each party to proceedings before the Tribunal is to pay its own costs. However pursuant to section 60 (2), the Tribunal is empowered to award costs if it is satisfied that there are "special circumstances" warranting an award of costs. 2. Section 60 of the NCAT Act provides: 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) 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. (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 the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014 ) or on any other basis. (5)Inthissection: "costs" includes-- (a) the costs of, or incidental to, proceedings in the Tribunal, and (b)the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal. 1. Pursuant to rule 38(2) of the Civil and Administrative Tribunal Rules 2014 (NSW) (the "NCAT Rules") the Tribunal may award costs even in the absence of special circumstances warranting such an award where, inter alia, the amount claimed or in dispute in the proceedings is more than $30,000: see rule 38(2)(b). 2. The provisions of rule 38 takes supremacy over the costs provisions contained in section 60: see Nguyen v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen[2015] NSWCATAP 264 at [82]- [86] 3. The effect of section 60(1) and (2) of the NCAT Act was discussed in Allen v TriCare (Hastings) Ltd [2017] NSWCATAP] 25 at [71] and [76]: [71]. Section 60 of the NCAT Act states the general proposition in subs (1) that each party to proceedings in the Tribunal is to pay the party's own costs. Section 60(2) modifies this by permitting the Tribunal to award costs but "only if it is satisfied that there are special circumstances warranting an award of costs". [76] "[S]pecial circumstances" for the purposes of s 60(2), are those which are out of the ordinary but they do not have to be extraordinary or exceptional: see the Appeal Panel in CPD Holdings Pty Ltd v Baguley [2016] NSWCATAP 160 at[6]; citing the Court of Appeal in Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 at [60] which concerned the same expression in the previous legislation governing the (then) Administrative Decisions Tribunal. In addition, s 60(3) gives a non-exhaustive list of matters that the Tribunal may take into account when determining whether there are special circumstances…. 1. In its submissions the Tenants relied on the following matters said to constitute special circumstances: 1. The Landlords commenced proceedings for essentially the same remedy being a termination order and release of the bond in circumstances where they had identical orders made on 30 March 21; 2. The second application was commenced recklessly and was tantamount to being misconceived, frivolous and/or vexatious; 3. It is in the interests of justice to find there are special circumstances warranting an award of costs against the Landlords; 4. The submission then addressed the matters in section 60(3) of the NCAT Act to which the Tribunal must have regard to in determining whether there are special circumstances. 1. Rule 38 is an exception to section 60 of the NCAT Act. Rule 38 (2) operates "Despite section 60 of the Act" and is not dependent upon or in any way constrained by the provisions of section 60(1) of the NCAT Act. 2. Rule 38(2)(b) enables the Tribunal to make an order for costs if satisfied the amount claimed or in dispute in the proceedings is more than $30,000 irrespective of whether a particular party has conducted the proceedings to the disadvantage of another. There is a general discretion to award costs where the amount claimed or in dispute exceeds $30,000. 3. The Tenants submit that Rule 38 applies in this case as the amount of rent arrears in dispute was accepted by Member De Jersey as exceeding $30,000.00. 4. The Tribunal rejects that submission and finds that Rule 38 does not apply to this application. The only orders sought by the landlords were in respect of the rental bond and termination and possession. The Landlords did not request in their application an order for rent arrears or any other money order. 5. The Tenants submit that the provisions of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") apply to proceedings before the Tribunal. The Tenants rely on R.42.20(1) which provides for costs on dismissal of proceedings. The Tribunal accepts the Landlords submission that the provisions of the UCPR do not apply in the Tribunal. 6. The issue in this application is whether the Tribunal is satisfied there are special circumstances warranting an order for costs. 7. Taking into consideration the submissions of the parties and the matters in section 60(3), the Tribunal is not satisfied there are special circumstances warranting an award of costs. 8. The evidence does not satisfy me that the Landlords conducted the proceedings in a manner which caused disadvantage to the Tenants. The Tenants submit that the claim was unmeritorious and had little chance of success. The claim was withdrawn before the hearing. There was no formal determination by the Tribunal on the merits of the claim. I reject the Tenants' submission. 9. The Tenants submit the Landlords were responsible for prolonging unreasonably the time taken to complete the proceedings. 10. The Appeal Panel dismissed the Tenants' appeal on 18 May 2021.The Landlords withdrew this Application on the following day. The Landlords acted quickly to withdraw these proceedings once they knew the outcome of the appeal. I reject the Tenants' submission. 11. The Tenants submit they incurred substantial legal costs to defend matters already agitated in the earlier proceedings. 12. The Landlords obtained orders for termination and possession under section 87 of the Act on 30 March 2021.The Tenants appealed that decision and were successful in obtaining a stay of the orders pending the determination of the appeal. 13. The Tribunal rejects the Tenants' submission that they were required to "defend matters already agitated in the 1st application for essentially identical orders which had been granted to the Landlords on 30 March 2021." 14. The legal requirements to make orders under sections 85 and 87 of the Act are substantially different. Whilst there may be some overlapping of the requirements, the Landlords were within their rights to seek an order for termination relying on the first NOT in case the Tenants' appeal was successful. 15. The material tendered by the Tenants in support of their submissions that the Landlords application had no merit, was misconceived, was vexatious or frivolous or otherwise misconceived or lacking in substance is not sufficient for the Tribunal to make the findings sought by the Tenants. 16. For the foregoing reasons the Tribunal is not satisfied that special circumstances exist which would justify departing from the usual rule under section 60 of the NCAT Act that each party pay their own costs. ********** 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: 27 September 2021