Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Willoughby Homes Pty Ltd v Pawar [2021] NSWCATAP 308 Hearing dates: On the papers Date of orders: 07 October 2021 Decision date: 07 October 2021 Jurisdiction: Appeal Panel Before: The Hon F Marks, Principal Member A Lo Surdo SC, Senior Member Decision: (1) the appeal is dismissed. (2) the appellant is to pay the costs of the respondent assessed in default of agreement. Catchwords: APPEAL that costs order inadequate – held appellant conducted proceedings in a manner which disentitled it to a full costs order – appeal dismissed Legislation Cited: Civil and Administrative Tribunal Rules r 38 Cases Cited: Calderbank v Calderbank [1975] 3 All ER 333 House v R [1936] HCA 40 Oshlack v Richmond River Council [1998] HCA 11 Category: Costs Parties: Willoughby Homes Pty Ltd (appellant) Kamaljit Pawar (respondent) Representation: Counsel: M Klooster (appellant) R Kent solicitor (respondent) Solicitors: New South Lawyers (appellant) Kent Attorneys (respondent) File Number(s): 2021/00139563 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 19 April, 2021 Before: G Ellis SC, Senior Member File Number(s): HB 20/24155 reasons for decision Background 1. In these proceedings the appellant is Willoughby Homes Pty Ltd and the respondent is Kamaljit Pawar. Both parties entered into a home building contract. Differences arose between the parties concerning allegations by the respondent that certain work had not been completed by the appellant and that some of the work carried out required rectification. 2. The respondent filed an Application in this Tribunal on 19 March 2019 seeking that certain consequential orders be made against the appellant. The parties reached agreement to resolve those proceedings on a consent basis and without any admission of liability by the appellant. Consent orders were made. The basis of the settlement was that the appellant would carry out specified building work within a nominated period. This work was not carried out during that period and the respondent brought a renewal application in this Tribunal on 27 May 2020 in which he sought the payment to him by the appellant of $148,177.17 as compensation. The appellant resisted this renewal application contending that by reason of the circumstances surrounding the management of the building contract a further work order should be made and that no compensation should be awarded to the respondent. 3. The renewal application was ultimately fixed for hearing before a Senior Member of this Tribunal for a period of two days commencing on 27 January 2021. We shall refer to what occurred during the course of that hearing shortly. For present purposes we note that on 4 March 2021 the Senior Member issued detailed and lengthy reasons for decision in which he determined to make a further work order. In doing so the Senior Member made an order that the appellant pay the respondent $3,450 being the cost of replacing carpet in a bedroom which had sustained water damage during the building works. 4. The Senior Member reserved the question of costs. The appellant subsequently sought an order for costs in its favour which the Senior Member considered in a second written decision (the costs decision). The appellant was awarded costs of the second day of the hearing only. The appellant seeks leave to appeal and to appeal from that costs order. Directions issued by the Tribunal for the preparation of the renewal hearing 1. The renewal application initially came on for hearing before the Tribunal differently constituted on 11 September 2020. The state of the hearing list did not permit the matter to proceed that day, on the basis that the parties advised the Tribunal that a two-day hearing was required. The Senior Member then presiding enquired of the legal representatives of the parties as to the state of the evidentiary material. The hearing was adjourned to enable two hearing days to be fixed. 2. Relevantly, for our purposes the Senior Member made a number of orders directed to the preparation of the proceedings for hearing. Included within those directions were the following (the numbering which we have used does not reflect the numbers of the orders as made): 1. the appellant in these proceedings was to give the respondent and the Tribunal "points of defence" by 9 October 2020. That document was described as constituting "a brief summary of the defence, stating in point form the reasons that the claim is opposed"; 2. each of the parties was to give to the other a copy of all documents on which each of them intended to rely, by no later than 30 October 2020. The relevant order contained a detailed description of what was encompassed by a "document"; 3. If a party sought an extension of time to comply with the directions an application was to be made in writing to the Tribunal no later than the day prior to the date for submission of documents; 4. not later than 14 days before the hearing the parties were to advise each other of any witnesses required for cross examination; 5. not later than seven days prior to the hearing the parties were to file a joint tender bundle, a statement of agreed facts and of the issues in contention and an outline of submissions, and a bundle of documents required for cross examination and topics for cross examination; and 6. the parties' representatives were to provide to the Tribunal not later than seven days before the hearing the names and contact telephone numbers of each witness, the estimated length of time required for cross examination and a timetable for the cross examination of each witness. 1. On 1 October 2020, the parties were advised by the Registry that the proceedings were listed for a two-day hearing commencing 27 January 2021. Relevant portions of the Renewal decision 1. In order to establish the relevant background to enable these appeal proceedings to be determined it is necessary that we refer to a number of matters contained in the renewal decision. 2. The Senior Member referred to the course of the two-day hearing. He noted that on the first day he was asked to allow the parties to engage in settlement discussions, which did not culminate in a negotiated settlement and the matter was required to proceed for hearing on the second day. 3. The Senior Member referred initially to the evidence which was to be provided by the appellant by 9 October 2020 pursuant to the earlier orders made on 11 September 2020 to which we have referred above. The Senior Member noted that this evidence was not provided, until after 5 PM on Friday, 22 January 2020, more than three months late. Further, given the Australia Day holiday on Tuesday, 26 January 2021, the day before the first day of the hearing, that left one working day for the applicant's solicitor to consider that evidence and take instructions. 1. After noting that the appellant had provided no explanation for the delay in complying with the earlier directions orders, other than "complications" in the office of its solicitors, the Senior Member referred to the prejudice which would accrue to the respondent if the documents including four affidavits were admitted into evidence. He rejected the tender but allowed certain documents exhibited to the affidavits to be admitted because the respondent was in possession of those documents. 2. After considering the evidence the Senior Member found that the appellant had provided adequate explanation for the delays in completing the outstanding work within the period nominated in the consent orders, it had been ready, willing and able to carry out that work, rectification work would have commenced but for the conduct of the respondent and it would be unjust to award the respondent a money order in circumstances where he caused or contributed to the delays that occurred. 3. The Senior Member made a number of detailed orders with respect to the outstanding work to be completed by the appellant in order to avoid any difficulties of the kind which had occurred previously. 4. The Senior Member allowed a claim brought by the respondent for $3,450 for the cost of replacing carpet which had been damaged in the course of the building works. 5. Finally, the Senior Member made orders allowing the parties to make submissions with respect to the question of costs. The Costs decision 1. The respondent made no application for a costs order in his favour. The appellant sought an order that costs should be awarded "on the ordinary basis" until 22 January 2021 and on an indemnity basis thereafter, or alternatively on the ordinary basis. The respondent submitted that no costs order should be made in favour of the appellant, but if costs were awarded, they should be confined to the costs of the hearing on the second day, namely 28 January 2021. 2. In his reasons for decision the Senior Member made the following observations which were not challenged by either party in these appeal proceedings: 1. the awarding of costs is governed by Rule 38 of the Civil and Administrative Tribunal Rules which relevantly provide: 38 Costs in Consumer and Commercial Division of the Tribunal (1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal. (2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if— (a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10(2) of Schedule 4 to the Act in relation to the proceedings, or (b) the amount claimed or in dispute in the proceedings is more than $30,000. 1. it followed that there was a general discretion to award costs, a successful party is generally entitled to receive a favourable costs order, costs are intended to compensate that party for the costs incurred in the proceedings and this general rule is applied unless there is "disentitling behaviour" by the successful party. 1. In this latter regard the Senior Member referred to the well-known decision of the High Court of Australia in Oshlack v Richmond River Council [1998] HCA 11 at [69]. That extract is from the judgment of McHugh J who was in dissent, but it is frequently cited as authority for the proposition stated in it. 69 The traditional exceptions to the usual order as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion. In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd, Devlin J formulated the relevant principle as follows: "No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct." "Misconduct" in this context means misconduct relating to the litigation [98], or the circumstances leading up to the litigation. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation[100]; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute. (citations omitted) 1. The Senior Member noted that the application for the award of indemnity costs was based on an offer of settlement according to the Calderbank principle (a reference to Calderbank v Calderbank [1975] 3 All ER 333. A copy of that settlement offer was not provided to him, making it impossible to determine its effect and the consequences of its non-acceptance for the purpose of considering whether indemnity costs should be awarded. In any event, that offer of settlement was forwarded by email sometime after 5 PM on Friday, 22 January 2021 and set a deadline for acceptance of 9 AM on the next working day, Monday, 25 January 2021. In the opinion of the Senior Member, this did not allow for appropriate time in which to consider the offer, and accordingly this also could not provide a basis for an award of indemnity costs. 2. The Senior Member then considered whether there was any "disentitling conduct" on the part of the appellant. The Senior Member noted that the appellant had not complied with any of the orders made on 11 September 2020 which we have summarised in [6] above. The Senior Member concluded that he was satisfied that by reason of this conduct the appellant "should not be entitled to recover costs on the basis that disregards its conduct". He said The Tribunal is satisfied that the failure to comply with directions and orders of the Tribunal, and the consequential disadvantage that caused to the owner, were such as to constitute some disentitling conduct and, as a result, the builder should not be awarded costs on the ordinary basis as that would be to overlook such conduct. Given the failure to comply with directions and the preparation of affidavits that were not allowed into evidence at the hearing, the Tribunal considers the proposal in the owner's submissions to be appropriate and awards the builder costs, confined to the costs of the hearing on Thursday, 28 January 2021, on the ordinary basis. That order will serve to exclude aspects such as the attendance at the directions hearing which resulted in orders which were not obeyed and the cost of preparing affidavits upon which the builder was not permitted to rely at the hearing. The appellant's grounds of appeal 1. in written submissions the appellant summarised its grounds of appeal as follows: 1. the Tribunal mistook the facts in exercising its discretion; 2. the Tribunal acted upon the wrong principle in exercising this discretion, was guided by irrelevant matters and failed to take into account material considerations; and 3. in the alternative, the decision was unreasonable to such an extent that an error can be inferred, and in particular, because the reasons given were "inadequate." 1. In essence, the appellant challenged the conclusion of the Tribunal that its failure to comply with directions was equivalent to disentitling conduct. In doing so the appellant focused on two primary matters being firstly, the failure to file points of defence and secondly, the aborted attempt to rely on evidence made available to the respondent on the day before the hearing. 2. With respect to the first matter, the appellant submitted that as the respondent had not filed any points of claim no prejudice was suffered by him by the appellant's failure to have filed points of defence. This argument completely misunderstands the gravamen of the order that was made. We have described it in [6(1)] above. The document was intended to provide the respondent with an understanding of the nature of and basis for the response of the appellant to the renewal application. There was no need for the respondent to file any further document, his position having been set out in the renewal application. Furthermore, in circumstances where for reasons associated with the conduct of the appellant's solicitor's office none of the orders was complied with, we do not accept this argument adduced on behalf of the appellant is anything other than an attempted ex post facto rationalisation of what occurred. It is patently obvious that the respondent would have been disadvantaged by not knowing the nature of and the basis of the case that was to be put forward on behalf of the appellant. 3. With respect to the second matter, it is clear that the respondent must have been prejudiced by reason of the legal costs incurred by him in having his solicitor examine the material produced at the last minute, furnishing advice with respect to it, and in formulating arguments before the Tribunal for its exclusion. On this basis it would be absurd for the appellant to contemplate any award of costs with respect to its contumelious failure to comply with all of the orders of the Tribunal set out in [6] above. 4. As we have said, the appellant's submissions fail to grapple with the totality of the effect of its failure to comply with any of the orders of the Tribunal which were designed to facilitate the cheap just and effective disposition of the proceedings. We have already described this failure as contumelious. It is axiomatic that it is unnecessary for us to attempt to describe the totality of the impact of these failures on the position of the respondent, because they are so obvious. They constitute an obvious example of disentitling conduct which applies to all aspects of the proceedings attaching to and related to these failures. 5. The appellant also submitted that the reasoning of the Senior Member was either inadequate or non-existent, in terms of the costs orders which he had made. We disagree. The reasons of the Senior Member should be read as a whole. He clearly referred to the failures of the appellant to comply with the directions made by the Tribunal, concluded that they had had an adverse impact upon the circumstances of the respondent, as was patently obvious, and were therefore sufficient to found his orders. 6. Finally, the appellant submitted that the discretion of the Senior Member miscarried in accordance with the well-known principles established in the High Court of Australia in House v R [1936] HCA 40. For the reasons which we have set out above we reject the appellant's submissions that the Senior Member has fallen into error in making the costs orders which are the subject of this appeal. It follows that the orders made were within the reasonable discretion of the Senior Member, and that there is no room for the application of the House v R principle. We reject this ground of appeal. 7. We apprehend that there is no appeal from the decision of the Senior Member to reject making any costs order on an indemnity basis. In any event, we conclude that the Senior Member's decision on this matter was correct for the reasons given by him. Costs of the appeal 1. The appellant submitted that if it were successful on the appeal, we should make an order that the respondent pay its costs of the proceedings below on the ordinary basis "save for any costs incurred at directions hearings and the costs incurred with preparation of any material that was not admitted into evidence." 2. The respondent submitted that if the appeal were dismissed or leave to appeal refused the appellant should be ordered to pay his costs. 3. As will be obvious from the reasons which we have set out above, we have reached the conclusion that the appeal should be dismissed. Having regard to the submissions of the parties with respect to costs, we can see no reason why an order for costs should not be made on the ordinary basis. We intend making a costs order accordingly. Conclusion and orders 1. The grounds of appeal raised questions of law, and it is unnecessary that we consider whether leave to appeal should be granted. In view of the conclusions which we have reached that there is no merit in the grounds of appeal and in the appeal overall, we intend to make an order dismissing the appeal. 2. For the reasons set out above we make the following orders: 1. the appeal is dismissed 2. the appellant is to pay the costs of the respondent assessed in default of agreement. ********** 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: 07 October 2021