Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Vella v LB Dellit Pty Ltd t/as Dellit Design and Construct [2021] NSWCATAP 376 Hearing dates: 26 August 2021 Date of orders: 22 November 2021 Decision date: 22 November 2021 Jurisdiction: Appeal Panel Before: Hon I Coleman SC, A-DCJ G K Burton SC, Senior Member Decision: (1) Leave to appeal is granted, to the extent that leave is required. (2) The appeal is allowed. (3) In substitution for Order 2 made by the Tribunal in HB 19/38213 and HB 19/48204 on 21 April 2021, order that there be no order as to the costs of the proceedings in the Tribunal. (4) Subject to order 5, order that the respondent pay the appellants' costs of the appeal on the ordinary basis as agreed or assessed. (5) Order that any submissions to vary order 4, including for an oral hearing on costs of the appeal, with supporting documents be filed and served within 14 days after date of these orders and any submissions in response with supporting documents be filed and served within 28 days after date of these orders. Catchwords: COSTS - HOME BUILDING - whether relevant considerations taken into account on exercise of discretion Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), ss 60, 80, 81, Sch 4 cll 12 Civil and Administrative Tribunal Rules 2014 (NSW), rr 38, 38A Cases Cited: AAI Ltd t/as GIO v McGiffen (2016) 77 MVR 348, [2016] NSWCA 229 Allianz Australia Insurance Ltd v Cervantes (2012) 61 MVR 443, [2012] NSWCA 244 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 Bauskis v Liew [2013] NSWCA 367 Bonita v Shen [2016] NSWCATAP 159 CEO of Customs v AMI Toyota Ltd (2000) 102 FCR 578, [2000] FCA 1343 Collins v Urban [2014] NSWCATAP 17 Cominos v Di Rico [2016] NSWCATAP 5 Craig v South Australia (1995) 184 CLR 163, [1995] HCA 58 Eadie v Harvey [2017] NSWCATAP 201 Ericon Buildings PL v Owners SP 96597 [2020] NSWCATAP 265 Habib v NSW Pollice [2014] NSWCATAP 70 Hamod v NSW [2011] NSWCA 367 House v The King (1936) 55 CLR 499, [1936] HCA 40 Jackson v Land and Housing Corporation [2014] NSWCATAP 22 Jegatheeswaran v Minister for Immigration & Multicultural Affairs (2001) 194 ALR 263, [2001] FCA 865 Johnson t/as One Tree Constructions v Lukeman [2017] NSWCATAP 45 Latoudis v Casey (1990) 170 CLR 534 Mifsud v Campbell (1991) 21 NSWLR 725 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332, [2013] HCA 18 Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Palme (2003) 216 CLR 212 NSW Land and Housing Corp v Orr (2019) 100 NSWLR 578, [2019] NSWCA 231 Oppidan Homes PL v Yang [2017] NSWCATAP 67 Oshlack v Richmond River Council (1998) 193 CLR 72 Pholi v Wearne [2014] NSWCATAP 78 Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Rodger v De Gelder (2015) 71 MVR 514, [2015] NSWCA 211 Sanofi v Parke Davis PL [No 1] (1982) 149 CLR 147 Soulemezis v Dudley (Holdings) PL (1987) 10 NSWLR 247 (CA) Thompson v Chapman [2016] NSWCATAP 6 Wainohu v NSW (2011) 243 CLR 181 Category: Costs Parties: Shelley and David Vella (Appellants) LB Dellit PL t/as Dellit Design and Construct (Respondent) Representation: Solicitors: Appellants in person by Mrs S Vella Adam & Partners Lawyers (respondent) File Number(s): 2021/00168783 Decision under appeal Court or tribunal: Consumer and Commercial Division Jurisdiction: NSW Civil and Administrative Tribunal Citation: N/A Date of Decision: 21 April 2021 Before: D G Charles, Senior Member File Number(s): HB 19/38213; HB 19/48204 Reasons for decision Factual and legal background to appeal 1. The appellants own a house in Pymble, a north shore suburb in Sydney, NSW. The respondent was engaged to carry out residential building work on the appellants' house. 2. On 16 February 2021, with amended orders on 18 March 2021 and extensions of time on 7 April 2021, the Tribunal made substantive orders, with written reasons, in the two proceedings brought respectively by the builder (HB 19/38213) and the owners (HB 19/48204). 3. The orders were to the effect that the owners were to pay the builder $76,068.97 and a work order in favour of the owners was made in respect of certain items that were a subset of the owners' claims. 4. The money order reflected a set-off between the following: $144,554.81 owed to the builder of which $9,016.71 was in contest and was decided in favour of the builder, and $68,485.84 being a money order in favour of the owners. 5. The Tribunal noted that the owners' claims the subject of the work order in the owners' favour totalled $69,160 according to the owners' calculation from the evidence and that the owners therefore received substantive relief in both proceedings to a value commensurate with $137,645.84 out of a value of their total claim of $315,227.07. 6. The outcome of the proceedings in terms of overall value was therefore approximately the same for each party. Most of the amount claimed by the builder was conceded with a small amount for a provisional sum adjustment resolved in favour of the builder. The owners' entitlement to a money order rather than a work order was noted as contested (whether liability or amount, or both, were contested or conceded) and, as to claims on which the owners succeeded, was resolved as to about 50% of found value in the owners' favour as to a money order with the balance being a work order. It was also noted as resolved (apart from one item) in the owners' favour in respect of preliminaries and margin being added. 7. The owners were noted as failing in respect of certain fees (totalling $8,991.45) and for a claim for loss of user damages (totalling $126,000), the latter on establishing liability for alleged misleading conduct and also on establishing relevant loss. It was noted in respect of the numerical majority of the failed part of the owners' claim – loss of user damages – as follows: "although the amount in dispute was significant in value …, I do not consider that the cross-examination of the parties' witnesses during the hearing and the submissions made pertinent to that claim, took an inordinate amount of time relative to the other issues in dispute." 1. The Tribunal noted that the builder chose to rely upon an open offer in respect of three major items including the water damage and mould caused by the water main not being turned off during the Christmas 2018 closure: "at a very late stage of the proceedings (ie, shortly before Day 3), and in circumstances where prior to the open offer being made, the Builder had elected not to respond to the substantive issues as to liability and quantum raised by the Owners' lay and expert evidence as regards the kitchen appliances, fireplaces and hygienist cleaning and testing." 1. In his substantive reasons the primary member had found that the builder effectively conceded liability but that he still was required to determine the appropriate relief and found that was a work order. He rejected a submission that the owners' not accepting the offer denied their entitlement to any relief. Reasons for primary decision 1. Since the claim exceeded $30,000 the Tribunal correctly found that the ordinary costs rules applied under para 38 of the Civil and Administrative Tribunal Rules 2014 (NSW), and that special circumstances did not need to be found under CATA s 60. 2. The Tribunal found that the test for a departure from the usual principle that costs followed the event was not satisfied and that there was no dissection for a dominant separable issue. 3. The Tribunal also found that it was not satisfied that either party by its conduct had materially increased the cost of the proceedings or otherwise had engaged in disentitling conduct. 4. The Tribunal also found, in respect of whether there should be a single costs order or a costs order in each proceeding, as follows: "In all of the circumstances, I find that it is appropriate to make a single costs order. The proceedings were significantly intertwined, as I explained in the Decision at [10]-[12]. In the final outcome it was very much a case of setting off the Builder's success in HB 19/38213 against the (more limited) success of the Owners in HB 19/48204." 1. The Tribunal stressed the common ground on the majority of the builder's claim, whether it was satisfied as an offset to the owner's claim or as a monetary payment to the builder, "depended upon a resolution of all other issues in dispute in both proceedings". (In the substantive decision the builder's contractual right to payment was found to have been established when the builder was entitled to terminate the contract or accept its repudiation.) 2. The Tribunal then said: "In gauging overall success, it is necessary to compare the optimal positions of the Builder and the Owners, respectively, with the actual outcome of their litigation in the Tribunal." 1. Having analysed and compared the "optimal" position of both parties in the litigation and what both parties had not succeeded on, as previously referred to, the Tribunal said: "it is tolerably clear that an actual outcome even if put in those terms, is still a long way short of, in fact not even half way to, the Owners' optimal position for their various claims". 1. That was expressed as the reason for not accepting that the builder should pay the Owners' costs of both proceedings. 2. The Tribunal also rejected the builder's submission that the owners should pay all of the builder's costs of both proceedings on the ordinary basis: "Earlier I referred to the aspects of the Owners' case which were successful. I do not think in the overall outcome of the litigation that the Owners' success (or Builder's lack of success) in the Tribunal's determination of those issues, played only a minor part (whether as to hearing time taken in the proceedings or as to submissions devoted to those issues) and therefore that the Owners' success in those issues may be disregarded in determining whether and to what extent a discount on a costs order is warranted." 1. Immediately prior to that statement the Tribunal had said: "While (on balance) overall success in the litigation came to the Builder, I believe that this is a case where the Owners' more limited success on certain issues, provides a proper basis to make an appropriate discount on any costs order in favour of the Builder." 1. Immediately after that statement the Tribunal said, in the final paragraph of the reasons: "Having carefully considered the parties' competing submissions as to costs, I have formed the view that an order for the Owners to pay 50% of the Builder's costs of the proceedings on the ordinary basis as agreed or as assessed, and otherwise each party to bear their own costs of the proceedings, is a fair assessment of how the costs incurred should be borne by the parties. In my opinion, such order reflects the overall circumstances of the case, without attempting to achieve any mathematical precision. It is also an order made in the context of the parties' conduct of the proceedings, including the hearing time engaged on issues in respect of which each party either succeeded or failed (as the case may be), as well as in the light of the overall outcome of the proceedings as reflected in the Decision." 1. The Tribunal did not expressly mention the relative need for the parties to "go to court" to establish their claims, which balance would lie in favour of the owners, but this may be because both parties both did have the requirement in some form. 2. The Tribunal noted, at the end of its substantive reasons on 16 February 2021, as part of an effort to have the parties negotiate a resolution on costs, "the parties have had mixed success with the various positions taken by them at the hearing as to the real issues in dispute". Extension of time 1. The notice of appeal was not filed until 10 June 2021 when the filing period expired 19 May 2021, three weeks earlier. 2. In support of their extension of time application the owners said that their "significant new evidence, which is the basis for the appeal, has only just been received on 10 June 2021 from [the builder's insurer]". The notice of appeal was filed on the same day. According to the builder's written submissions in reply to appeal, the builder subsequent to the Tribunal's orders had claimed on its insurance. 3. The owners pointed to the reason for delay being outside the control of the owners and the absence of prejudice to the builder. The work orders had been required, under the orders made 21 April 2021, to be completed by 16 May 2021. The builder had not completed these or other work orders that had been extended on the builder's application to 30 July 2021. The required investigative works under the orders revealed more mould issues and significantly increased the scope of works. The time taken for the builder's insurer to obtain documentation and determine the claim favourably to the owners were "completely out of the Owners' control". The extension of a few weeks, compared with the "numerous" previous extensions to the builder and the nature of the appeal, being on costs that remained to be agreed or the assessment process begun, indicated a lack of relevant prejudice compared with the prejudice to the owners from being denied a ground that allegedly showed increased success for the owners on the scope and value of the work order concerning mould remediation. 4. Section 41 (1) of the Civil and Administrative Tribunal Act 2013 (NSW) (CATA) provides: The Tribunal may, of its own motion or on application by any person, extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction despite anything to the contrary under that legislation. 1. In Habib v NSW Police [2014] NSWCATAP 70 at [72] to [74] the Appeal Panel said that the discretionary power of the Tribunal to grant an extension of time was "unfettered but it must be exercised judicially" having regard to the objective stated in CATA s 36, namely, "to facilitate the just, quick and cheap resolution of the real issues in the proceedings". 2. In Jackson v Land and Housing Corporation [2014] NSWCATAP 22, the Tribunal at [21]-[22] stated that the relevant considerations were: the length of the delay; the reason for the delay; the appellant's prospects of success, i.e. whether there is a fairly arguable case, and the extent of any prejudice suffered by the respondent to the appeal. 3. Here the delay was not overly long in the context and nature of the appeal and the absence of any commencement of an assessment process or any other evidence of relevant prejudice. Although the owners' other appeal grounds could have been filed and then amended, the owners, who represented themselves in the appeal hearing, clearly regarded this ground as central to their appeal prospects (irrespective of the merits of that view, with which we deal below) and deferred filing until they had the evidence for this ground, which arguably was consistent with the guiding principle and parties' obligations in CATA s 3(d) and s 36. Grounds of appeal 1. Since we do not know whether the notice of appeal, and the submissions which clarified the grounds of appeal, were or were not drafted with legal assistance (they were signed by the appellants), we have summarised below the grounds in the notice of appeal taking into account: 1. CATA s 38(2) which provides that the Tribunal "may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice"; 2. the views of the Appeal Panel in Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [12] and Cominos v Di Rico [2016] NSWCATAP 5 at [13] that the stated grounds of appeal should be reviewed to discern grounds that may either raise a question of law or a basis for leave to appeal, and 3. the requirement to balance such review against the obligation to act fairly and impartially as expounded in Bauskis v Liew [2013] NSWCA 367 at [68] citing Hamod v NSW [2011] NSWCA 367 at [309]-[316]. 1. The notice of appeal was said to be "based on significant new evidence relating to actual costs outcomes, which are materially relevant for decision on cost, not previously available or known to Owners or Tribunal at time of cost orders". It was said to justify the primary costs order being amended to the builder paying 50% of the owners' costs of the proceedings or that overall there be no order as to costs, "in keeping with the Tribunal's outlined methodology in determining overall success of litigation". 2. As outlined in the preceding section of these reasons dealing with extension of time, the significant new evidence was the documentation from the builder's insurer in response to the enlarged scope of mould remediation recommended by the expert report required to be obtained by the builder under the primary work orders of 16 February 2021. There had been earlier advice on that scope that was relied upon by the Tribunal in setting the scope of the work order but only to the extent of $17,617.60. The insurer increased assessed value from $17,617.80 to $104,277.80. The insurer also pointed to further works that it regarded as the basis for a separate claim. 3. The effect of the ground was said to be that, if one added the extra amount of works within the existing work order (excluding the works the insurer regarded as the basis for a separate claim), being $86,660.20, to the Tribunal's findings of $137,645.84 in terms of money order and owners' estimate of work order, the resulting total of effective recovery (called by the appellants actual outcome or basis of success) by the owners increased to $224,306.04 which was 71.16% of the owners' maximum claim of $315,227.07 compared with 43.67% when one took $137,645.84 as the numerator and $315,227.07 as the denominator. 4. This was said to be consistent with the Tribunal's approach to costs of gauging overall success by comparing optimal positions of the parties with actual outcomes in the litigation. 5. The foregoing aspect of the grounds clearly alleged an error of fact requiring grant of leave to appeal. 6. In their written submissions in chief the owners clarified their grounds by making express what was inherent in the notice of appeal. The decision was said not to be fair and equitable on a number of bases in addition to the significant new evidence already mentioned in detail: 1. "The Tribunal failed to consider the real issue when exercising its discretion." 2. "The Tribunal miscarried when exercising its discretion in determining costs." 3. "The Tribunal erred in double penalising Homeowners in costs." 4. "The Tribunal failed to provide proper reasons for why it determined overall success to the builder." 1. Again consistent with the approach in Prendergast and the other authority and statutory provision cited above in this section of our reasons, the owners' characterisation of these grounds must be assessed. We discern in grounds (1), (2) and (4) an alleged error of law on the legal principles governing appeals discussed below, in addition to or possibly in place of the alleged integers required to justify a grant of leave to appeal in respect of an alleged error of fact. We do not understand ground (3) as adding in substance to the other grounds as we have just characterised them. 2. The builder's written submissions in reply on appeal engaged with the substance of the above appeal grounds, even though the focus at the hearing of the appeal was on certain aspects, particularly the further evidence. Applicable legal principles governing appeals 1. CATA s 80 provides as follows: "(1) An appeal against an internally appealable decision may be made to an Appeal Panel by a party to the proceedings in which the decision is made. Note. Internal appeals are required to be heard by the Tribunal constituted as an Appeal Panel. See section 27(1). (2) Any internal appeal may be made — (a) in the case of an interlocutory decision of the Tribunal at first instance—with the leave of the Appeal Panel, and (b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance—as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds. (3) The Appeal Panel may — (a) decide to deal with the internal appeal by way of a new hearing if it considers that the grounds for the appeal warrant a new hearing, and (b) permit such fresh evidence, or evidence in addition to or in substitution for the evidence received by the Tribunal at first instance, to be given in the new hearing as it considers appropriate in the circumstances." 1. Clause 12 of Schedule 4 to CATA states: "An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with)." 1. A Division decision is a primary decision of the Consumer and Commercial Division. The primary decision here is such a decision. 2. CATA s 4(1) contains the following relevant definitions to the nature of the decision from which an appeal is brought: "ancillary decision of the Tribunal means a decision made by the Tribunal under legislation (other than an interlocutory decision of the Tribunal) that is preliminary to, or consequential on, a decision determining proceedings, including— (a) a decision concerning whether the Tribunal has jurisdiction to deal with a matter, and (b) a decision concerning the awarding of costs in proceedings." "'interlocutory decision' of the Tribunal means a decision made by the Tribunal under legislation concerning any of the following— (a) the granting of a stay or adjournment, (b) the prohibition or restriction of the disclosure, broadcast or publication of matters, (c) the issue of a summons, (d) the extension of time for any matter (including for the lodgment of an application or appeal), (e) an evidential matter, (f) the disqualification of any member, (g) the joinder or misjoinder of a party to proceedings, (h) the summary dismissal of proceedings, (h1) the granting of leave for a person to represent a party to proceedings, (i) any other interlocutory issue before the Tribunal." 1. In Ericon Buildings PL v Owners SP 96597 [2020] NSWCATAP 265 at [26] the Appeal Panel, in the course of refusing leave to appeal a procedural order, focused at [9]-[10] on the required connection of an ancillary decision with a decision determining proceedings, not a decision which the party alleged should have been made to determine the proceedings. In that case, the orders under appeal noted a consent to judgment that had not been accepted by the applicant and set a timetable for a foreshadowed transfer application on which the transfer could be contested on the basis there was a tender of the maximum amount of the Tribunal's jurisdiction. Those orders were found to be interlocutory in character and therefore to require leave to appeal under CATA s 80(2)(a). Leave to appeal was refused at [13]-[18] because no decision that was said to be in error had actually been made; "for completeness", among other matters the Panel expressed the view at [19]-[27] that the Tribunal would be entitled to take into account the possibility that the Tribunal's jurisdiction on a work order was not limited to a value of $500,000 and at [28]-[36] that there was no tender of the Tribunal's maximum jurisdiction of $500,000 by actual payment. 2. The Ericon characterisation is consistent with the orthodox test, implicit in the statutory definitions cited above, that an interlocutory decision does not finally determine the rights of the parties in respect of the relief claimed in the proceedings: see, eg, Sanofi v Parke Davis PL [No 1] (1982) 149 CLR 147 at 152. 3. A question of law may include, not only an error in ascertaining the legal principle or in applying it to the facts of the case, but also taking into account an irrelevant consideration or not taking into account a relevant consideration, which includes not making a finding on an ingredient or central issue required to make out a claimed entitlement to relief: see CEO of Customs v AMI Toyota Ltd (2000) 102 FCR 578 (Full Fed Ct), [2000] FCA 1343 at [45], applying the statement of principle in Craig v South Australia (1995) 184 CLR 163 at 179. 4. These categories are not exhaustive of errors of law that give rise to an appeal as of right. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13], the Appeal Panel enunciated the following as specifically included: 1. whether the Tribunal provided adequate reasons; 2. whether the Tribunal identified the wrong issue or asked the wrong question; 3. whether it applied a wrong principle of law; 4. whether there was a failure to afford procedural fairness; 5. whether the Tribunal failed to take into account a relevant (that is, a mandatory) consideration; 6. whether it took into account an irrelevant consideration; 7. whether there was no evidence to support a finding of fact; and 8. whether the decision was legally unreasonable. 1. In relation to adequacy of reasons, it is essential to expose the reasons for resolving a point critical to the contest between the parties but the manner in which that obligation is discharged varies according to the nature of the jurisdiction being exercised, the court or tribunal exercising it and the subject matter being determined: Soulemezis v Dudley (Holdings) PL (1987) 10 NSWLR 247 (CA) at 259, 270-272, 280-281; Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Palme (2003) 216 CLR 212 at [40]; Wainohu v NSW (2011) 243 CLR 181 at [58]; NSW Land and Housing Corp v Orr (2019) 100 NSWLR 578, [2019] NSWCA 231 at [65]-[77]; CATA s 62(3). 2. A failure to deal with evidence may also in the appropriate circumstances be characterised as a failure to have regard to a relevant consideration or a failure to have regard to critical evidence. It is generally not mandatory to consider particular evidence: Rodger v De Gelder (2015) 71 MVR 514, [2015] NSWCA 211 at [86]; Allianz Australia Insurance Ltd v Cervantes (2012) 61 MVR 443, [2012] NSWCA 244 at [15] per Basten JA (McColl and Macfarlan JJA agreeing). However, by s 38(6)(a) of the CATA, the Tribunal "is to ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings." This obligation includes an obligation to have regard to material which has been disclosed to the Tribunal and which is relevant to the facts in issue, at least where that material is of some significance. Further, at common law, where a decision-maker ignores evidence which is critical to an issue in a case and contrary to an assertion of fact made by one party and accepted by the decision-maker, this is an error of law because the reasons are thereby rendered inadequate: Mifsud v Campbell (1991) 21 NSWLR 725 at 728; Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [62]-[63]; Eadie v Harvey [2017] NSWCATAP 201 at [61]-[62]. 3. The "no evidence" ground must identify that there is no, or substantially inadequate, evidence to support a "critical" or an "ultimate" fact in order to constitute a jurisdictional error (a form of error of law): AAI Ltd t/as GIO v McGiffen (2016) 77 MVR 34, [2016] NSWCA 229 at [81]; Jegatheeswaran v Minister for Immigration & Multicultural Affairs (2001) 194 ALR 263, [2001] FCA 865 at [52]-[56]. 4. Legal unreasonableness can be concluded if the Panel comes to the view that no reasonable tribunal could have reached the primary decision on the material before it: Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 230; Minister for Immigration and Citizenship v Li (2013) 249 CLR 332, [2013] HCA 18 at 364 [68]. A failure properly to exercise a statutory discretion may be legally unreasonable if, upon the facts, the result is unreasonable or plainly unjust: Li at 367 [76]. There is an analogy with the principle in House v The King (1936) 55 CLR 499, [1936] HCA 40 at 505 that an appellate court may infer that there has been a failure properly to exercise a discretion "if upon the facts [the result] is unreasonable or plainly unjust" and with legal unreasonableness as a ground of judicial review: Li at 367 [76]. 5. Turning to errors of fact, in Collins v Urban [2014] NSWCATAP 17, after an extensive review from [65] onwards, an Appeal Panel stated at [74]–[79] and [84(2)] as follows: "74 Accordingly, it should be accepted that a substantial miscarriage of justice may have been suffered because of any of the circumstances referred to in cl 12(1)(a), (b) or (c) where there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance. 75 As to the particular grounds in cl 12(1)(a) and (b), without seeking to be exhaustive in any way, the authorities establish that: 1 If there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" - Hutchings v CTTT [2008] NSWSC 717 at [35], Atkinson v Crowley [2011] NSWCA 194 at [12]. 2 The decision under appeal can be said to be "against the weight of evidence" (which is an expression also used to describe a ground upon which a jury verdict can be set aside) where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach - Calin v The Greater Union Organisation Pty Ltd (1991) 173 CLR 33 at 41-42, Mainteck Services Pty Limited v Stein Heurtey SA [2013] NSWSC 266 at [153]. … 78 If in either of those circumstances the appellant may have been deprived of a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved then the Appeal Panel may be satisfied that the appellant may have suffered a substantial miscarriage of justice because the decision was not fair and equitable or because the decision was against the weight of the evidence. 79 In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result because of one of the circumstances referred to in cl 12(1)(a), (b) or (c), it will be generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this then, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred - see the general discussion in Kyriakou v Long [2013] NSWSC 1890 at [32] and following concerning the corresponding provisions of the [statutory predecessor to CATA (s 68 of the Consumer Trader and Tenancy Tribunal Act)] and especially at [46] and [55]. 84 The general principles derived from these cases can be summarised as follows: … (2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed." 1. Even if the appellant establishes that it may have suffered a substantial miscarriage of justice within cl 12 of Sch 4 to the CATA, the Appeal Panel has a discretion whether or not to grant leave under s 80(2) of that Act (see Pholi v Wearne [2014] NSWCATAP 78 at [32]). The matters summarised in Collins v Urban, above, at [84(2)] will come into play in the Panel's consideration of whether or not to exercise that discretion. 2. In appellate review of the exercise of a discretion as to costs, as with other discretionary decisions, a reviewing court or tribunal must be cognisant that reasonable minds may differ on the correct exercise of discretion from alternatives all of which are within a range of reason. Unless the factors identified in House v The King (1936) 55 CLR 499, [1936] HCA 40 at 505 are satisfied, the fact that the reviewing court or tribunal may have chosen a different alternative is not sufficient to upset the exercise of discretion. Those factors were stated as follows: "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." Errors of law 1. The present appeal was against only the costs order made on 21 April 2021. In some jurisdictions an appeal against costs alone would require leave: see Supreme Court Act 1970 (NSW) s 101(2)(c). In our view the effect of CATA s 80(2) with the definition of "ancillary decision" set out above mean that this appeal is brought as of right in respect of any error of law. 2. As already said, we discern alleged errors of law if the above appeal grounds are properly characterised, including within the ground of further evidence to meet the Tribunal's focus on comparison of optimal and actual outcomes. The alleged errors are that the Tribunal did not identify the real issue, give adequate reasons and take into account all relevant considerations in the exercise of its discretion in respect of costs, such that the exercise of discretion miscarried. 3. We agree with that contention. In its focus on comparing optimal and actual outcomes and other factors such as time taken on particular issues and the way the parties conducted the proceedings, the Tribunal in our view did not take into account a highly relevant consideration on the existing evidence and findings, which was the overall value to the owners of the actual outcome and the substantial equation of actual outcomes for the parties, as has earlier been described. 4. It is true that the Tribunal did mention, as we have quoted earlier, "the overall outcome of the proceedings as reflected in the Decision". What was lacking was identification of the content of that phrase and justification for the integers in, and not in, that content. 5. This was particularly the case when there had been no prior consideration of the substantial equivalent value of relief achieved by each party when the orders in favour of the owners were fully brought into account being both work orders and money order, at the values before the Tribunal. 6. Rather, the focus of the prior reasoning that fitted within the phrase just quoted was on the outcome achieved by each party compared with the amount of each party's claim. That was a relevant integer, but so was the missing integer that we have just identified. 7. There were no reasons for not referring to the substantial equivalent value of relief achieved by each party and instead focusing, when considering outcomes, on comparing what was achieved with what was claimed by each party. In our view a relevant consideration was not taken into account, or at least justified as to why it was not taken into account. The owners' written submissions on appeal made this point in slightly different form when referring to the Tribunal's conclusion, previously cited, that overall success in the litigation came to the builder: "However nowhere in the Costs Decision did the Tribunal outline how that overall success was achieved". 8. Further, in our view the substantial equivalence of outcomes achieved by the parties was such a relevant consideration that it ought prominently have been considered in the exercise of discretion, otherwise the exercise of discretion miscarried. 9. Indeed, in our view the exercise of discretion would not have fallen into error if the orthodox approach was adopted of first deciding whether either party was substantially successful simply on outcome. The substantial equivalence of outcome for each party would then have been given prominence, with the conclusion that neither party was substantially successful. 10. In our view, the foregoing errors of law in themselves justify upholding the costs appeal. Leave to appeal 1. If the foregoing grounds (1), (2) and (4) contain other than errors of law (e.g., mixed errors of law and fact) and require leave to appeal, which we do not consider to be the case but deal with for completeness, then in our view that leave should be granted and the appeal allowed. 2. In that respect, the Tribunal's not taking into account, in comparing optimal with actual outcomes, the estimated value of the work order in favour of the owners even on the existing evidence was against the weight of evidence and was not fair and equitable because it did not take into account a crucial element of value in the owners' actual outcome that led to a substantial equation of actual outcomes for the parties from the litigation. 3. If that value had been taken into account then in our view there is a significant possibility or a fairly open chance that a more favourable outcome on costs would have been achieved by the owners than was ordered, with the consequence that a substantial miscarriage of justice may have been suffered. The omission was apparent and central to the Tribunal's decision, justifying the exercise of discretion to grant leave to appeal against the failure to take into account the fact of substantial equivalence of actual outcome and the full consideration of the relief ordered on which that was based. 4. The further evidence aspect of the appeal grounds clearly required a grant of leave as we have already said. It was said to be the inclusion of the extra value inherent in the work order because that order required an investigation to see if further work was required within the scope of the order. 5. As we pointed out to the owners during the hearing, their percentage calculation including the extra value of the work order did not include adding that extra value to the denominator being the amount of the owners' claim. When one did that, the amount of their claim recovered against the amount sought rose from 43.67% to 55.81% but not to 71.16%. 6. In our view the increased value of the work order was not reasonably available at the time of hearing because it was quantified as a consequence of the investigation ordered by the Tribunal on facts found in the proceedings. The percentage increase was significant because it raised the owners' recovery to above half their claim. 7. We are less convinced that there was a significant possibility of a different outcome, at a slight majority compared with a slight minority, so as to amount to saying that the owners may have suffered a substantial miscarriage of justice. We are also less convinced that there was a clear error in exercise of discretion that would justify the grant of leave on this aspect of the appeal grounds. In the event we do not need to express a concluded view on that matter as there are existing bases to find, as we have set out, that the appeal should be allowed. Appropriate relief on appeal 1. CATA s 81 provides as follows: "(1) In determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following— (a) the appeal to be allowed or dismissed, (b) the decision under appeal to be confirmed, affirmed or varied, (c) the decision under appeal to be quashed or set aside, (d) the decision under appeal to be quashed or set aside and for another decision to be substituted for it, (e) the whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel. (2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when confirming, affirming or varying, or making a decision in substitution for, the decision under appeal and may exercise such functions on grounds other than those relied upon at first instance." 1. In our view it would be contrary to the guiding principle in CATA s 36 and the objective in CATA s 3(d) not to set aside the costs order appealed against and not to determine the question of costs at first instance. To do otherwise would require the parties to return to the Tribunal to argue a costs order. There is no indication from either party in the papers on which this appeal is being determined as to further evidence which if tendered would make a sufficient difference to justify the additional time and cost of remission. 2. We accordingly shall determine the primary costs order on the material before us and substitute that for the current primary Order 2. 3. In our view, where the relative outcomes on each parties' claims were substantially equal, there were no distinctive issues justifying separate treatment of particular costs, and no matters that stood out in the conduct of the hearing, the appropriate order is that there be no order as to the costs of the primary hearing. Costs of appeal 1. The builder appeared on appeal by legal representation; the owners represented themselves at the appeal hearing and the degree to which they had legal assistance in preparation was not clear. 2. As correctly stated by the primary member, r 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) applies the same costs rules as applied in the Division when there is a departure under the Division rules (such as under rule 38) from CATA s 60. 3. The starting point for exercise of costs discretion on the usual principles is that costs follow the event. "The event" is usually the overall outcome of the proceedings – did the successful party have to go to the Tribunal (in this case) to get what it achieved, rather than being offered at least that relief. If there are distinct issues on which the party seeking relief did not succeed, that may be taken into account in the exercise of costs discretion. Appeal Panel decisions have made no order as to costs (to the intent that each party paid its or their own costs of the appeal) where there has been a measure of success on both sides: Johnson t/as One Tree Constructions v Lukeman [2017] NSWCATAP 45 at [25]-[29]; applied in Oppidan Homes PL v Yang [2017] NSWCATAP 67. 4. Here the appellants needed to pursue this appeal to obtain relief from the burden of an adverse costs order. They have achieved success in varying that costs order to their significant advantage which was the "event" on the appeal. They are therefore entitled to their costs of the appeal, which should be on the ordinary basis as agreed or assessed for reasons which follow. 5. For an award of costs on other than the ordinary basis, a party's conduct of the proceedings themselves, or the nature of the proceedings themselves (for instance, misconceived), or an outcome less favourable than an offer, are considered. The principles are explored in Latoudis v Casey (1990) 170 CLR 534, Oshlack v Richmond River Council (1998) 193 CLR 72 and in this Tribunal in Thompson v Chapman [2016] NSWCATAP 6 and Bonita v Shen [2016] NSWCATAP 159, citing earlier consistent authority. The principles have resonance with at least some of the "special circumstances" in CATA s 60 that are required to justify a costs order when r 38A does not apply. 6. On the appeal, each party pursued, as was their right, their view of the appropriateness or otherwise of the Tribunal's exercise of discretion on first instance costs. Each party co-operated with the Tribunal. There was no indication of any significant misconduct. 7. We have come to the foregoing view on the costs of the appeal on the material before us. We shall give the parties the opportunity to put forward an alternative basis. The view we have expressed will be the costs order on appeal if that opportunity is not taken up. We note in this respect that the builder has already filed costs submissions on appeal. Those submissions were premised on a different outcome to this appeal. We accordingly consider it appropriate to give both parties the further opportunity if they wish to debate the costs of the appeal. Orders 1. The orders that we accordingly make are as follows: 1. Leave to appeal is granted, to the extent that leave is required. 2. The appeal is allowed. 3. In substitution for Order 2 made by the Tribunal in HB 19/38213 and HB 19/48204 on 21 April 2021, order that there be no order as to the costs of the proceedings in the Tribunal. 4. Subject to order 5, order that the respondent pay the appellants' costs of the appeal on the ordinary basis as agreed or assessed. 5. Order that any submissions to vary order 4, including for an oral hearing on costs of the appeal, with supporting documents be filed and served within 14 days after date of these orders and any submissions in response with supporting documents be filed and served within 28 days after date of these orders. ********** 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: 22 November 2021