Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Palazzi v Beyer t/as Leisure Pools and Spas Newcastle (No 2) [2020] NSWCATCD 19 Hearing dates: On the papers Date of orders: 28 January 2020 Decision date: 28 January 2020 Jurisdiction: Consumer and Commercial Division Before: G Sarginson, Senior Member Decision: (1) The application for a lump sum costs order is determined on the papers in accordance with s 50 (2) of the Civil and Administrative Tribunal Act 2013 (NSW). (2) Order 4 of the Tribunal dated 23 October 2019 is varied to reflect Order 3 below. (3) Jamie Beyer t/as Leisure Pools and Spas Newcastle is to pay William Palazzi and Debra Palazzi the costs of and incidental to the proceedings in Matter HB 19/39023 in the fixed lump sum amount of $9,042.70 to be paid by 28 days from the date of this costs decision. Catchwords: COSTS — Lump sum costs order — Whether appropriate — Quantum of lump sum costs order Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 (NSW) Cases Cited: Oshlack v Richmond River Council [1993] HCA 11; (1993) 193 CLR 73 Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403; Profitability Consulting Pty Ltd v Thorpe [2018] NSWCATAP 41 Ellis v The Owners-Strata Plan No 80605 [2018] NSWCATAP 174 Anderson v The Owners-Strata Plan No 61034 (No 2) [2019] NSWCATAP 108 Texts Cited: Nil Category: Costs Parties: William Palazzi (First Applicant) Debra Palazzi (Second Applicant) Jamie Beyer t/as Leisure Pools and Spas Newcastle (First Respondent) Leisure Pools Newcastle Pty Ltd (Second Respondent) Representation: First and Second Applicant (Self-represented) File Number(s): HB 18/39023 Publication restriction: Nil REASONS FOR DECISION 1. This is an application for variation of a costs order made by the Tribunal in the substantive proceedings. 2. On 23 October 2019 the Tribunal ordered that the first respondent pay the applicant damages for defective residential building work. The Tribunal published reasons comprising 35 pages. 3. Both the applicant and the first respondent were self-represented in the proceedings. 4. Order 4 of the Tribunal was that the first respondent pays the applicant's costs as agreed or assessed. However, the Tribunal noted that both parties were self-represented, and the applicant had expended disbursements in respect of expert evidence. 5. Order 5 of the Tribunal gave the applicant leave to make an applicator to vary the costs order. The practical effect of this order was that the applicant may apply to the Tribunal for a lump sum costs order. 6. The applicant notified the Tribunal in writing that a lump sum costs order was sought, in the period prescribed under order 5 of the Tribunal dated 23 October 2019. 7. The Tribunal then issued written directions for the filing and serving of submissions and documents on the issue of costs. The submissions gave the parties the opportunity to submit whether they agreed to the issue of the application for a lump sum costs order being determined on the papers and without further oral hearing. 8. The applicant filed and served submissions and documents in accordance with Tribunal directions. No submissions were received from the first respondent by 20 January 2020, nor any application made to extend the timetable for submissions and documents. 9. The Tribunal understands the first respondent has appealed the decision dated 23 October 2019 to the Appeal Panel of the Tribunal. However, this does not alleviate the responsibility of the Tribunal to determine the application for variation of the costs order. Further, the disposition of the appeal will be assisted if there are no outstanding costs issues at first instance. 10. The submissions and documents of the applicant seek a lump sum costs order in the amount of $9,495.65. Attached to the submissions are invoices in respect of the following: 1. Tax Invoice of Mr Daniel Phillips of Thomas and Associates dated 19 June 2018 in the amount of $990 for site visit and preparation of report; and receipts of payment; 2. Receipt for filing fee for instituting proceedings in the Tribunal in the amount of $269.07; 3. Tax Invoice of Mr Steve Savage of CSG Engineers dated 22 February 2019 for site visit and preparation of report in the amount of $3,190; 4. Tax invoice of Roberts Legal dated 28 February 2019 for advice given in the NCAT proceedings in the amount of $2,263.58; and receipts of payment; 5. Tax invoice of Mr Steve Savage of CSG Engineers for preparation of expert report in reply in the amount of $1,089; 6. Tax invoice of Mr Steve Savage of CSG Engineers for attendance at the NCAT hearing on 2 September 2019 in the amount of $1,694. CONSIDERATION 1. The Tribunal referred to relevant costs principles in its reasons dated 23 October 2019 at paras [115]-[117]. As discussed in that decision, the amount claimed or in dispute in the proceedings exceeded $30,000, and r 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) applies to the proceedings. Accordingly, no special circumstances under s 60 (2) of the Civil and Administrative Tribunal Act 2013 (NSW) ('the NCAT Act') need to be established to make costs orders. 2. The general rule is that costs follow the event, in that the successful party to proceedings is entitled to a costs order in its favour: Oshlack v Richmond River Council [1993] HCA 11; (1993) 193 CLR 73 at [67] and [134]. Costs orders are to compensate the successful party for the legal costs and disbursements incurred in taking proceedings. 3. The type of costs that the homeowner can recover as a self-represented litigant are limited to costs payable as legal costs and disbursements if the homeowner was legally represented in the proceedings, not general time and expenses incurred in preparing the case or attending the hearing: Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403; Profitability Consulting Pty Ltd v Thorpe [2018] NSWCATAP 41. 4. The Tribunal has the power to make lump sum costs orders, where it is appropriate to do so: Ellis v The Owners-Strata Plan No 80605 [2018] NSWCATAP 174 ('Ellis') at [44]-[49]; Anderson v The Owners-Strata Plan No 61034 (No 2) [2019] NSWCATAP 108 at [28] and the authorities cited therein. Lump sum costs orders are appropriate where the Tribunal has sufficient information to fairly assess costs on the materials available; and may particularly be appropriate where the amount of costs in dispute is modest, and there is no utility to having the parties participate in a potentially lengthy, complex and expensive cost assessment process. 5. Under s 60 (4) (a) of the NCAT Act, the Tribunal has the power to determine "by whom and to what extent" costs are to be paid. Under s 60 (5) (a) of the NCAT Act, "costs" includes costs "of, or incidental to, the proceedings". 6. The Tribunal is satisfied that there should be a lump sum costs order made in favour of the applicant. The amount claimed by the applicant for costs is relatively modest (less than $10,000) and the applicant has provided tax invoices and receipts to support the amounts claimed. The Tribunal is satisfied that it is not appropriate, considering the amounts claimed and the invoices provided, to make the parties engage in the potentially length, complex and costly assessment process. Rather, a lump sum order is appropriate. 7. The applicant has provided tax invoices for the disbursements incurred in respect of the filing fee in the Tribunal and the costs of Mr Savage (the expert engineer engaged by the applicant to prepare expert reports and attend the hearing in the Tribunal). It is clear that such costs are disbursements within the principles set out in Profitability Consulting Pty Ltd v Thorpe [2018] NSWCATAP 41 at para [21]. 8. The applicant has also provided a tax invoice and receipt in regards to the report fee of Mr Phillips, who was the first expert engineer the applicant engaged to provide a report. That report was obtained approximately 3 months prior to the commencement of proceedings, but was served in the proceedings. 9. The content of Mr Phillips report was discussed in the reasons of the Tribunal dated 23 October 2019 at paras [46]-[51]. The Tribunal is satisfied that the fee paid by the applicant to Mr Phillips is a cost "incidental" to the proceedings, because it was necessary for the applicant to have the swimming pool inspected by an engineer and obtain a report as a precursor to filing proceedings in the Tribunal. 10. In respect of the tax invoice of Roberts Legal dated 28 February 2019, the Tribunal is satisfied that the applicant obtained legal advice during the course of the proceedings, and paid for the legal advice. Such an amount falls within the definition of "costs". However, in respect of legal advice, there is a distinction between party/party costs (which are recoverable under an order that costs be paid on the ordinary basis) and solicitor/client costs (which are not recoverable in addition to party/party costs unless there has been an indemnity costs order). 11. In Ellis at [45]-[46], the Appeal Panel referred to the principle that a discount of between 10% to 30% is often applied to the amount of costs claimed on a lump sum basis, to take into account the vicissitudes of the costs assessment process; including in respect of assessment of rates charged by lawyers, and costs that may be discounted in whole or part due to being regarded as solicitor/client costs. 12. However, such a discount is discretionary, and the Tribunal is not bound to apply such a discount to costs and disbursements that are clearly recoverable, such as amounts paid (or owed) to expert witness to prepare reports and attend the hearing. 13. In regards to the lump sum amount claimed by the applicant, the Tribunal applies a 20% discount to the amount of $2,263.58 contained in the tax invoice of Roberts Legal dated 28 February 2019 for legal advice to the applicant. Accordingly, that amount is reduced to $1,810.86. 14. The Tribunal does not regard it as appropriate to apply a discount to the amounts claimed for the filing fee; the expert report of Mr Phillips; the expert reports of Mr Savage; or the cost of Mr Savage attending the Tribunal on 2 September 2019 to give evidence. 15. The Tribunal is satisfied that a lump sum costs order should be made in favour of the applicant in the lump sum amount of $9,042.70. 16. Further, the Tribunal is satisfied that it is appropriate that the issue of the application for a lump sum costs order be determined on the papers, rather than a further oral hearing conducted. ORDERS 1. The application for a lump sum costs order is determined on the papers in accordance with s 50 (2) of the Civil and Administrative Tribunal Act 2013 (NSW). 2. Order 4 of the Tribunal dated 23 October 2019 is varied to reflect Order 3 below. 3. Jamie Beyer t/as Leisure Pools and Spas Newcastle is to pay William Palazzi and Debra Palazzi the costs of and incidental to the proceedings in Matter HB 19/39023 in the fixed lump sum amount of $9,042.70 to be paid by 28 days from the date of this costs decision. ********** 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: 17 March 2022