Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Day v Quince's Quality Building Services Pty Ltd (No 2) [2021] NSWCATAP 373 Hearing dates: On the papers Date of orders: 19 November 2021 Decision date: 19 November 2021 Jurisdiction: Appeal Panel Before: I R Coleman SC ADCJ, Principal Member R C Titterton OAM, Senior Member Decision: (1) The proceedings be remitted to the Consumer and Commcercial Division of the Tribunal for redetermination in accordance with these reasons. (2) The respondent pay the appellants' costs of the appeal as agreed or as assessed. (3) There be no order as to costs in matter HB 20/43841. Catchwords: COSTS – discretion to award costs – general rule is each party is to pay their own costs – where party has been unsuccessful on some issues – where those issues have not significantly added to costs Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) - s 38 Civil and Administrative Tribunal Rules (2014) NSW - r 38(2)(b) Cases Cited: Adrenaline Pty Ltd v Bathurst Regional Council (2015) 322 ALR 180 BCS Strata Management Pty Ltd v The Owners Corporation SP 61759 [2016] NSWCATAP 275 Day v Quince's Quality Building Services Pty Ltd [2021] NSWCATAP 296 Latoudis v Casey (1990) 170 CLR 53 Markinsky v Zammit [2016] NSWCATAP 253 Oshlack v Richmond River Council (1998) 193 CLR 72 Pateman v Higgin (1957) 97 CLR 521 Sabah Yazgi v Permanent Custodians Ltd (No 2) [2007] NSWCA 306 Texts Cited: None cited Category: Costs Parties: Aron Day (First Appellant) Claire Day (Second Appellant) Quince's Quality Building Services Pty Ltd (Respondent) Representation: Counsel: D Hand (Appellants) A Joseph (Respondent) Solicitors: Gadens Lawyers (Appellants) Watkins Tapsell Solicitors (Respondent) File Number(s): 2021/00196952 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 31 May 2021 Before: G Meadows, Senior Meadows File Number(s): HB 20/43841 REASONS FOR DECISION Introduction 1. The appellants appealed from a decision of the Civil and Commercial Division of the Tribunal (Tribunal) of 10 June 2021 in matter HB 20/043841 (Decision). 2. In our reasons published on 30 September 2021, we allowed the appeal: Day v Quince's Quality Building Services Pty Ltd [2021] NSWCATAP 296 (Appeal Decision). 3. In these reasons we will employ the same defined terms used in the Appeal Decision. 4. As we stated in the Appeal Decision, there were four grounds of appeal, namely (in summary) that: 1. the Tribunal erred in misconstruing cl 14 of the Contract; 2. the Tribunal erred by failing to determine material issues raised by the appellants in their points of claim dated 4 January 2021 and the revised claim filed on 20 May 2021; 3. the Tribunal erred in determining, without providing any reasons, that it was just and equitable that the respondent be remunerated on a quantum meruit basis; 4. the Tribunal erred by failing to afford the appellants procedural fairness; and failing to conduct the proceedings in accordance with the rules of natural justice, as required by s 38 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act). 1. We found Ground One established: Appeal Decision at [52] to [59]. As we stated at [59], our view was that, by upholding that ground alone, the matter should be remitted to the Tribunal for a redetermination of all issues. However, we also briefly considered the remaining grounds of appeal. 2. We found that the Tribunal failed to consider the matters raised in Ground Two and stated that in relation to this ground the appeal should be allowed and the matter remitted: Appeal Decision at [64]. 3. We found that the appeal in relation to Ground Three should also be allowed: Appeal Decision at [71]. 4. However, we did not think that the appellants had been denied procedural fairness by the Tribunal (Ground Four): Appeal Decision at [72] to [79]. 5. At the conclusion of our reasons we provided a timetable for the service of submissions for the parties to address the issues of: * the extent of the remitter; and * costs of the appeal * costs of the proceedings at first instance. Appellant's submissions Remitter 1. The appellants submit that the proceedings should be remitted to the Tribunal for a redtermination of all issues. Costs of the appeal 1. The appellants note that the amount in dispute in the proceedings before the Tribunal was $219,733.08. Accordingly, they submit that the Appeal Panel has a wide discretion to make an order for costs pursuant to r 38(2)(b) of the Civil and Administrative Tribunal Rules (2014) NSW. They submit that the starting point in exercising the discretion is that the "usual order" is that successful parties should be entitled to an order for costs in their favour: Latoudis v Casey (1990) 170 CLR 534; Oshlack v Richmond River Council (1998) 193 CLR 72. 2. They submit that as the appellants succeeded in three of their four appeal grounds, each of which raised complex issues that required the appellants to obtain legal advice and representation, the "usual order" as to costs is appropriate. Costs at first instance 1. The appellants submit that the appropriate order is that each party pay its own costs of the hearing before the Tribunal. 2. The appellants also note that they were not legally represented before the Tribunal. Respondent's submissions Remitter 1. The respondent submits that the remitter should be restricted to a rehearing of those specific matters raised on appeal but with the right for parties to bring additional evidence as may be relevant in light of the Appeal Panel's decision. In all other respects, it submits that the Tribunal's decision should be left undisturbed. Costs of the appeal 1. While the respondent acknowledges the "starting point is that costs follow the event, it submits that there are substantial grounds to depart from that principle in this appeal. 2. The respondent's primary submission is that there should be no order as to the costs of the appeal with the intent that each party pay their own costs. It submits that as the appellants were successful on the basis of arguments not advanced at trial, the "well-known and recognised basis" for not applying the usual order as to costs should apply: Adrenaline Pty Ltd v Bathurst Regional Council (2015) 322 ALR 180 at [89]. 3. The respondents note that the appellants were unsuccessful in relation to Ground Fourt, which they submit was a "clearly distinct issue that took up a significant part of the appeal process": Sabah Yazgi v Permanent Custodians Ltd (No 2) [2007] NSWCA 306 at [24]. 4. Finally, the respondent submits that if its primary position is not accepted then "something less" than all of the appellants costs' should be awarded on the basis of the matters referred to above and the mixed result on appeal. Costs at first instance 1. The respondent submits that the Appeal Panel should make no order as to the costs at first instance on the basis that any argument about those costs are reserved to be dealt with by the Tribunal on remitter. Appellant's submissions in reply Remitter 1. In summary, the appellants submit that: 1. in Pateman v Higgin (1957) 97 CLR 521, Kitto J observed that as a matter of principle, the general rule is that a new hearing should be ordered on the whole of a case under appeal, and that to grant a new hearing on one issue only is the exception, observing at [2]: … it remains, I think, a sound general proposition from which to start in the consideration of each particular case according to its own circumstances that if there is to be a new trial it ought to be of the case as a whole unless the Court thinks that 'they shall do more injustice by setting the matter at large again. 1. this is not a case where the Appeal Panel should separate the issue of liability from the issue of quantum; 2. the appellants have successfully appealed against the findings of the Tribunal both on questions of liability and quantum in a home building claim for damages arising from a contract with the respondent builder. As the orders made by the Tribunal have been set aside by the Appeal Panel, the way is clear for a remittal of the entire matter for a rehearing of the appellants' claim for damages against the respondent; 3. the Appeal Panel should reject the respondent's submission that an issue estoppel "arguably" arises in relation to the remittal of those parts of the Tribunal's decision that were not the subject of challenge on appeal; 4. although the respondent contends that certain components of the appellants' claim against it should not be remitted, it offers no assistance to the Appeal Panel in attempting to frame the scope of "issues" that it says should be determined in a rehearing, other than to suggest that they should be limited to the "specific matters raised on appeal". The appellants submit that the respondent leaves to the Appeal Panel the tasks of identifying those paragraphs of the Tribunal's decision that should remain undisturbed, and of attempting to "tease out" from the reasons those components (and any overlapping parts) of the appellants' claim that should be remitted for a rehearing; 5. the Appeal Panel should reject the respondent's submission that considerable time and expense was incurred by it in dealing with those components of the appellants' claim that were not the subject of appeal, and that its expenditure was otherwise be wasted. The appellants submit: 1. first, the evidence on which the respondent relied may be adduced at the rehearing, so there is no wasted expense in its expert evidence or in the preparation of its lay material; 2. secondly, the parties' costs of the hearing before the Tribunal cannot be divided between the various components of the appellants' claim; 3. thirdly, the hearing before the Tribunal ran for barely half a day. Costs of the appeal 1. The appellants submit that: 1. although it is correct that some of the arguments advanced on appeal were not advanced by the appellants below, those arguments included matters of law about which submissions ought to have been made to the Tribunal by the respondent; 2. the Appeal Panel should reject the submission that it award "something less than all" of the appellants' costs as: 1. the appellants succeeded on three of the four grounds of appeal, and are entitled to their costs; 2. there is no proper basis for the respondent's contention that the appeal ground in respect of a failure to afford procedural fairness took up a significant part of the appeal process as most of the written submissions and the hearing time was focussed on the appeal grounds on which the appellants succeeded. Costs at first instance 1. The appellants submit that: 1. the Appeal Panel should reject the respondent's submission that the costs below should be reserved and be determined on the new hearing; 2. the Appeal Panel is best placed to determine that question, having ordered that the costs order below be set aside; and 3. the appropriate order is that there be no order for costs at first instance. Consideration Remitter 1. In the Appeal Decision at [58] we observed that the Tribunal misinterpreted cl 14 and erred in its conclusion in par [83] of the Decision, and that what the Tribunal should have done, as the appellants submitted, was to have directed its attention to whether the works had decreased, or whether there were omissions from the works, such that there was "work not now required" to be done. 2. We considered that the appeal should be allowed on that ground, and that by upholding that ground alone, the matter should be remitted to the Tribunal for a redetermination of all issues. 3. We remain of that view, and accept the appellants' submission that it is not appropriate to narrow the range of issues to be determined on the remittal. 4. It will be a matter for the Tribunal to determine what evidence may be filed at the new hearing. Costs of the appeal 1. The amount in dispute before the Tribunal was $218,733.03. Therefore the appellants correctly submit that r 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) applies. Rules 38 and 38A 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. 38A Costs in internal appeals (1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of— (a) enabling legislation, or (b) the Division Schedule for the Division of the Tribunal concerned, or (c) the procedural rules. (2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal. 1. Accordngly, we accept, as do the parties, that the "starting point" is that costs follow the event. However, we do not accept, as submitted by the respondent, that there are "substantial grounds" to depart from that position. 2. We reject the submission that the appellants were successful on the basis of arguments not advanced at trial. The appellants were successful because they correctly submitted that the Tribunal erred in misconstruing cl 14 of the Contract, erred by failing to determine material issues raised by the appellants in their points of claim and erred in determining that it was just and equitable that the respondent be remunerated on a quantum meruit basis. 3. As to the appellants being unsuccessful in relation to the procedural fairness ground of appeal, a "clearly distinct issue that took up a significant part of the appeal process" (Sabah Yazgi v Permanent Custodians Ltd (No 2) [2007] NSWCA 306 at [24]), while we accept that this Ground was a "clearly distinct issue", we reject the proposition that it took up a "significant part of the appeal process". 4. In any event, we note that in BCS Strata Management Pty Ltd v The Owners Corporation SP 61759 [2016] NSWCATAP 275 the Appeal Panel observed that in Markinsky v Zammit [2016] NSWCATAP 253 at [29] the Appeal Panel had said that: In proceedings in which multiple issues are contested … the conventional approach is that costs will follow the event, that is, in accordance with the outcome of the proceedings as a whole without an attempt being made to differentiate between particular issues on which the successful party overall may not have succeeded: Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38]; James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [32]. 1. In our view, it cannot be said that the appellants' pursuit of Ground Four increased the costs of the proceedings or extended the length of the hearing in any material way. 2. The respondent should pay the appellant's costs of the appeal as agreed or as assessed. 3. We reject the respondent's submission that if its propositons are rejected, the appellants should be awarded "something less" than all of their costs. Costs at first instance 1. It would have been open to us to order the respondent to pay the appellants' costs of the proceedings at first instance. However, we consider that the appropriate and fair order to make, as submitted by the appellants, is that each party pay its own costs of the hearing before the Tribunal. Orders 1. The Appeal Panel orders: 1. The proceedings be remitted to the Consumer and Commcercial Division of the Tribunal for redetermination in accordance with these reasons. 2. The respondent pay the appellants' costs of the appeal as agreed or as assessed. 3. There be no order as to costs in matter HB 20/43841. ********** 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. 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