Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Brennan v Building Zone Constructions Pty Ltd (No. 2) [2022] NSWCATAP 122 Hearing dates: On the papers Date of orders: 26 April 2022 Decision date: 26 April 2022 Jurisdiction: Appeal Panel Before: G Ellis SC, Senior Member P Molony, Senior Member Decision: 1. A hearing of the question of the costs of the appeal is dispensed with. 2. Order 5, made on 31 March 2022 in this appeal, is set aside. 3. Each party is to pay their own costs of the appeal. Catchwords: COSTS - Appellants succeed on quantum, not liability - Appellants' evidence on quantum not considered at first instance - Error beyond the control of either party Legislation Cited: Civil and Administrative Rules 2014 Civil and Administrative Tribunal Act 2013 Cases Cited: Brunsprop Pty Ltd v Joanne Hay & Wes Davies [2015] NSWCATAP 152 eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 Category: Costs Parties: Gabrielle Brennan and Garin Clarke (Appellants) Building Zone Constructions Pty Ltd (Respondent) Representation: Colin Biggers & Paisley (Appellants) Mr D Murray (Respondent) File Number(s): 2022/0016187 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 22 December 2021 Before: R Notley, Senior Member File Number(s): HB 21/07056 reasons for decision Outline 1. Orders were made on 31 March 2022 for the respondent to pay the appellants' costs of the appeal unless submissions seeking a contrary order were provided within two weeks with any response to be provided within two weeks thereafter. 2. The respondent's lodged submissions on costs dated 5 April 2022. Undated submissions for the appellants were subsequently received. We have decided that each party should bear their own costs of the appeal. Background 1. At first instance, the builder (the respondent) was found to be entitled to recover on a quantum meruit basis. The owners (the appellants) were ordered to pay $126,542.16. On appeal, the appellants challenged both liability and quantum. 2. The appellants were unsuccessful on liability but succeeded on quantum because there was a clear failure on the part of the Tribunal at first instance to consider the appellants' evidence with respect to quantum. Respondent's submissions 1. In the respondent's submissions it was noted that the appellants succeeded on quantum but not liability and that the error identified on appeal was not of the respondent's making. 2. It was also noted that the appellants, who presented their own case at first instance, had legal representation on appeal with the result that the amount sought for costs was likely to be significant. 3. Finally, it was said that a costs order in relation to the appeal would deprive the respondent of part of the "fruits of its success" at first instance with the prospect of an award, at any rehearing, of an amount similar to that previously ordered. Appellants' submissions in reply 1. It was contended that the appellants had a reasonable expectation as costs would normally follow the event although it was conceded that the event was not necessarily the outcome since individual issues could be considered. However, it was submitted that the normal position is that considering issues rather than outcome is not generally done unless there are dominant or separable issues. 2. It was also said that the failure to consider the appellants' evidence on quantum was not the fault of the appellants. The submissions then proceeded to refer to s 60 of the Civil and Administrative Tribunal Act 2013 (the NCAT Act) which, as indicated below, does not appear to be applicable in this instance. Relevant law 1. The starting point for a consideration of the costs of first instance proceedings in the Tribunal, is s 60 of the NCAT Act, the effect of which is that each party is to bear their own costs unless there are special circumstances which warrant an order for costs. 2. However, s 35 of the Act operates to make s 60 subject to Rule 38 of the Civil and Administrative Tribunal Rules 2014 (the Rules) which provides that costs may be awarded if the amount claimed or in dispute exceeds $30,000. 3. Rule 38A reads: "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." 4. Since the amount claimed or in dispute at first instance exceeded $30,000, it was rule 38 and not s 60 which applied in relation to costs at first instance. Therefore, by reason of rule 38A, rule 38 applies to this appeal and it is this not necessary to consider whether there are special circumstances which warrant an order for costs. 5. It is well established that while the discretion in relation to costs depends on the facts and circumstances of each case: Brunsprop Pty Ltd v Joanne Hay & Wes Davies [2015] NSWCATAP 152 at [27]. 6. It is also clear that the discretion to award costs must be exercised judicially, in a manner that is nether capricious nor arbitrary: eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48]. Consideration 1. As we are satisfied that the issues of costs can be adequately determined in the absence of the parties by considering their written submissions, we will make an order dispensing with a hearing pursuant to s 50(2) NCAT Act. 2. The submissions for the appellants overlook the fact that they contended, on appeal, that the respondent was not entitled to recover on a quantum meruit basis, as recorded in our reasons at [23]. 3. Since the appellants sought to contest both liability and quantum in their appeal, both parties have been successful: the respondent maintained the finding on liability; the appellants had the finding on quantum set aside. While the issue of quantum was dominant, the issue of liability was plainly severable. 4. For that reason, we are satisfied that the discretion as to costs should be exercised by ordering that each party pay their own costs of the appeal. 5. We also note that awarding costs to the appellants would be tantamount to making the respondent pay for an error for which it cannot be said to have had any responsibility. However, that is not to be taken as indicating the appellants bore any responsibility either. The error upon which the appeal was beyond the control of either party as it appears to have been an oversight by the member at first instance. 6. In addition, we consider the position on quantum was so clear as to not require legal representation. The fact that the appellants chose to retain a lawyer for the appeal does not necessarily mean their costs of doing so are recoverable. 7. If, contrary to our view, s 60 was applicable in this instance, we are not satisfied there were special circumstances, having regard to the matters set out in s 60(3) of the NCAT Act. Even if it could be said there were special circumstances, we are not persuaded that this is a case that warrants a departure from the default position that each party is to bear their own costs. Conclusion 1. For the reasons indicated above, the orders made are as follows: 1. A hearing of the question of costs of the appeal is dispensed with. 2. Order 5, made on 31 March 2022 in this appeal, is set aside. 3. Each party is to pay their own costs of the appeal. ********** 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: 26 April 2022