Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Terranian Building Group Pty Limited v Snaith [2022] NSWCATAP 271 Hearing dates: On the papers Date of orders: 18 August 2022 Decision date: 18 August 2022 Jurisdiction: Appeal Panel Before: I Coleman SC ADCJ, Principal Member D Fairlie, Senior Member Decision: The Appellant, Terranian Building Group Pty Limited is to pay the Respondent's costs of the appeal on a party/party basis agreed or assessed Catchwords: APPEALS – appeal withdrawn by appellant – order for costs in favour of the respondent Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 (NSW) Home Building Act 1989 (NSW) Cases Cited: One.Tel Pty Limited v Deputy Commissioner of Taxation [2000] FCA 270 Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 Texts Cited: Nil Category: Costs Parties: Terranian Building Group Pty Limited Appellant – Costs Respondent Henry Snaith Respondent – Costs Applicant Representation: Solicitors: Kheir Lawyers (Appellant – Costs Respondent) Mills Oakley Lawyers (Respondent – Costs Applicant) File Number(s): 2022/00088179 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 28 February 2022 Before: S A McDonald, Senior Member File Number(s): HB 20/48725 REASONS FOR DECISION OVERVIEW 1. This is an application for costs made by a respondent to an internal appeal following the withdrawal of that appeal by the appellant. For the reasons that follow we have made an order that appellant should pay the respondent's costs of the appeal. BACKGROUND 1. On 20 November 2020 Henry Snaith, a home owner ("the Costs Applicant"), commenced proceedings in the Tribunal against Terranian Building Group Pty Limited ("the Costs Respondent"), seeking damages for defective and incomplete home building work and for breaches of section 18A and 18B of the Home Building Act 1989 (NSW), in relation to the construction of a residential property for the home owner at Dundas Valley. The builder defended the proceedings. 2. The matter was heard on 28 and 29 September 2021 and on 28 February 2022 the Tribunal published its Reasons for Decision and made the following orders: 1. The Respondent, Terranian Building Group Limited is to pay the Applicant, Henry Snaith, the sum of $500,000 on or before 28 March 2022; 2. The Respondent is to pay the Applicant's costs on a party/party basis as agreed or assessed. 1. On 28 March 2022 the Costs Respondent filed a Notice of Appeal in relation to both the substantive money order and the costs order. On 8 April 2022 the appeal was listed for a Call Over before Principal Member Suthers and was set down for hearing on 30 June 2022 (a further order was made that day amending that date to 20 June 2022). The Principal Member also made the usual orders and timetable on setting down an appeal for hearing, including that leave be given to the parties to be legally represented. 2. On 2 May 2022 the appeal was again listed before Principal Member Suthers and the following orders were made: 1 A hearing of the application to withdraw the appeal is dispensed with. 2 The appeal is withdrawn and is dismissed. 3 The hearing on 20 June 2022 is vacated and the partied are excused. 1. The Principal Member also noted that the Costs Applicant had applied for his costs of the appeal and made directions for the parties to lodge with the Registry their submissions and evidence in favour of, or opposing this application. He also noted that the Appeal Panel may dispense with a hearing and determine the application for costs on the basis of the written submissions and evidence provided to it. THE COSTS APPLICANT'S SUBMISSIONS 1. On 2 May 2022 the Costs Applicant, by his solicitor, filed a submission in support of his application for costs. He said that the Costs Respondent's withdrawal of the appeal amounted to a capitulation and that in those circumstances costs should follow the event and be awarded to the Costs Applicant. 2. The Costs Applicant also said that he satisfied the "special circumstances" requirement under section 60(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (the "NCAT Act"), as the appeal involved a claim of over $30,000 and the parties were legally represented and further that, by operation of rule 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) (the "NCAT Rules"), the Appeal Panel should apply the same costs provisions that the Tribunal at first instance had applied. The Costs Applicant also said that he consented to the Appeal Panel dealing with and determining the application on the papers. No submissions were received from the Costs Respondent. OUR DECISION 1. We are satisfied that the cost issues for determination can be adequately determined in the absence of the parties by considering the written submissions. and accordingly we dispense with an in-person hearing. We note that the Costs Applicant consented to this course. No response was received from the Costs Respondent. 2. The general principle in relation to costs where proceedings are determined without a hearing on the merits, is that there will be no order as to costs (re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622). However this principle may be displaced, when, amongst other circumstances, one party has capitulated. 3. In One.Tel Pty Limited v Deputy Commissioner of Taxation [2000] FCA 270, Burchett J at [6] commented on this exception in the following terms: In my opinion it is important to draw a distinction between cases where one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event or settlement so removes or modifies the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for the exercise of a Court's discretion otherwise than by an award of costs to the successful party. 1. The Appeal Panel was not provided with the Costs Respondent's notice withdrawing its appeal, not with a transcript of what was said by the parties or their legal representatives on 2 May 2022 so that, in the absence of any submission to the contrary from the Costs Respondent, it appears that the withdrawal of the appeal by the Costs Respondent did amount, in substance, to a capitulation, as alleged by the Costs Applicant. 2. In these circumstances we think that general rule should not apply and that the Appeal Panel should entertain the Costs Applicant's application. 3. Following the withdrawal of the appeal by the Costs Respondent, the Principal Member was entitled to dismiss the appeal under section 55(1)(a) of the NCAT Act, as he did. Section 5 of the NCAT Act sets outs what constitutes a decision of the Tribunal and this includes a dismissal of proceedings. Thus the Appeal Panel is able to consider and, where appropriate, and make an award of costs. 4. Section 60(1) of the NCAT Act, provides that each party to proceedings in the Tribunal is to pay the party's own costs. However the Tribunal may award costs if it is satisfied that there are "special circumstances", having regard to the matters set out in section 60(3)(a) – (f) of the NCAT Act, and in section 60(3)(g), having regard to any other matter that it considers relevant. 5. Alternatively, rule 38 of the NCAT Rules, provides that where proceedings have been commenced in the Consumer and Commercial Division of the Tribunal, as these proceedings were, costs may be awarded in the absence of special circumstances, if the amount claimed is more than $30,000 - rule 38(2)(b). 6. Also rule 38A of the NCAT Rules, as was noted by the Costs Applicant, provides that the Appeal Panel should apply the same cost provisions that the Tribunal applied at first instance. 7. The Tribunal at first instance did not specify the basis on which it made the costs order in favour of the Costs Applicant. However we can infer that the order was made under rule 38(2)(b), as the Tribunal's Reasons for Decision do not include a discussion of any "special circumstances". We also propose to deal with this application under rule 38(2)(b). 8. On this basis we see no reason why the Costs Applicant should not be entitled to his costs of the appeal. The Costs Respondent's Notice of Appeal challenged the Tribunal's order that it pay to the Costs Applicant the amount of $500,000, so that an amount well in excess of $30,000 remained in issue in the appeal proceedings. 9. The Costs Applicant said that he had incurred "not insignificant expenses" in responding to the appeal. These costs are unlikely to be large given that the appeal was withdrawn less than six weeks after it had been commenced and before the Costs Applicant was required to take any step to comply with the directions made by the Principal Member on 8 April 2022. Nevertheless the costs cannot be assumed to be trivial, and, again in the absence of any submission to the contrary from the Costs Respondent, we see no basis for not exercise our discretion in favour of the Costs Applicant and awarding him his costs. 10. Lastly, although we propose to make the costs order as requested, we should add that the Costs Applicant's submission that he had satisfied the special circumstances provision because the amount claimed exceeded $30,000, appears to conflate section 60 of the NCAT Act with NCAT rule 38. The amount claimed in Tribunal proceedings is not included in section 60(3)(a) – (f) of the NCAT Act as a matter relevant to whether there are special circumstances. Rather, it provides an alternative basis for awarding costs. Likewise, legal representation is not referred to in sections 60(3)(a) – (f) of the NCAT Act, though perhaps it could be considered by the Tribunal to be a relevant factor under section 60(3)(g), and nor is it a reason to award costs under rule 38. ORDER 1. We make the following order: 1. The Appellant, Terranian Building Group Pty Limited is to pay the Respondent's costs of the appeal on a party/party basis as agreed or assessed. ********** 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: 18 August 2022