Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Royal Flair Caravans Pty Ltd v Kylie Ryan Productions Pty Ltd (No 2) [2022] NSWCATAP 341 Hearing dates: On the papers Date of orders: 2 November 2022 Decision date: 02 November 2022 Jurisdiction: Appeal Panel Before: A Suthers, Principal Member P Durack SC, Senior Member Decision: (1) A hearing with respect to the costs issues in this appeal is dispensed with. (2) The respondent is to pay the appellant's costs of the proceedings at first instance, MV 19/56143, on the ordinary basis, as agreed or assessed. (3) The respondent is to pay one third of the appellant's costs of the appeal, on the ordinary basis, as agreed or assessed. Catchwords: COSTS - special circumstances not required -application of general rule that costs follow the event - appellant successful on appeal but not on significant new issue raised on appeal concerning jurisdiction of the Tribunal - discount of appeal costs awarded to appellant in the circumstances. Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Cases Cited: James & Ors v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 Markunsky v Zammit t/a Zammit Quality Constructions [2016] NSWCATAP 253 Royal Flair Caravans Pty Ltd v Kylie Ryan Productions Pty Ltd [2022] NSWCATAP 215 Texts Cited: Nil Category: Costs Parties: Royal Flair Caravans Pty Ltd (Appellant) Kylie Ryan Productions Pty Ltd trading as Inside Outside Bathurst (Respondent) Representation: Counsel: A.D. Crossland and J Widjaja (Appellant) Solicitors: Andrew Croxford and Associates Lawyers (Appellant) Respondent (No Appearance) File Number(s): AP 2021/00323948 Publication restriction: Nil Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 20 July 2021 Before: D G Charles, Senior Member File Number(s): MV 19/49277; MV 19/56143 REASONS FOR DECISION 1. On 30 June 2022, we upheld the appellant's appeal from various orders made in the Consumer and Commercial Division of the Tribunal in proceedings MV 19/56143 between the appellant (RFC) and the respondent (KRP) under which RFC was ordered to indemnify the respondent KRP against KRP's liability under the Australian Consumer Law (NSW) to the purchaser of a caravan, as found in separate proceedings, MV 19/49277, heard at the same time as the indemnity proceedings: see Royal Flair Caravans Pty Ltd v Kylie Ryan Productions Pty Ltd [2022] NSWCATAP 215. 2. KRP was the supplier of the caravan to the purchaser and RFC was the manufacturer of the caravan. 3. In accordance with directions we made concerning applications for costs of the appeal, RFC has applied for an order that KRP pay its costs of the appeal. As a consequence of its success on the appeal, RFC has also sought an order that KRP pay its costs of the proceedings KRP brought against it for indemnity in the proceedings at first instance. RFC has stated that it is content for these questions to be dealt with on the papers. 4. Our directions included directions for KRP to provide written submissions about the costs of the appeal, including any reply to RFC's submissions, and about whether these questions should be determined on the papers. However, no such submissions have been provided by KRP and a considerable period of time has elapsed since the time when KRP's submissions were due. 5. In view of RFC's position about determining these questions on the papers, the absence of any opposition to that course from KRP, the limited nature of the questions to be decided, and our view, having considered RFC's written submissions, that the questions can be adequately determined without an oral hearing, we have decided, pursuant to s 50 (2) of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act), to dispense with a hearing in relation to these questions and to proceed to determine these questions on the papers. 6. We agree with RFC that we should determine both the costs of the appeal and its application for an order that KRP pay its costs of proceedings MV 19/56143. Whilst RFC's written submissions on the substantive appeal made no reference to such an application, an order for such costs was sought by RFC in the Notice of Appeal and requested orally at the hearing of the appeal on the basis that it naturally followed in the event RFC succeeded in overturning the indemnity orders. 7. Our directions for written submissions concerning costs made on 30 June 2022 referred only to the question as to the costs of the appeal. However, following correspondence from RFC after these orders were made, further directions were made on the appeal by Principal Member Suthers on 26 July 2022, which specified that the respondent should address the issue as to the costs of the indemnity proceedings at first instance in their written submissions. As we have said, no written submissions have been provided by the respondent 8. As RFC has submitted, we are satisfied that we should approach both questions of costs on the basis that the general rule in the Tribunal that costs will only be ordered where special circumstances are found (s 60 of the NCAT Act) is not applicable. Accordingly, the starting point for resolving these costs questions is that costs should follow the event. This is because we are satisfied that we must apply the approach set out in Rule 38 of the Civil and Administrative Tribunal Rules 2013 (the NCAT Rules) to both the question of costs at first instance and the costs of the appeal. 9. As to this, Rule 38 provides: (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. 1. Rule 38A provides: (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. There can be no doubt that the amount in dispute in both the proceedings at first instance and on appeal was more than $30,000. 2. In the indemnity proceedings at first instance, KRP had sought to be indemnified against such liability as it was found to have to the purchaser in respect of its claim for either a refund of the purchase price in the sum of $75,975.00 or compensation in the sum of $47,805.00, along with an indemnity in respect of its costs of defending the purchaser's proceedings. So far as the appeal costs are concerned, RFC appealed against the orders that it indemnify KRP in respect of its liability to the purchaser as found in the sum of $47,805.00 and that it indemnify KRP in respect of KRP's costs of the proceedings brought by the purchaser. Both at first instance and on appeal, the relevant claims were disputed. 3. In these circumstances, generally, costs should follow the event with the result that the costs orders sought by RFC should be made. 4. However, where a losing party has succeeded on a discrete issue that occupied a significant amount of time and work in the proceedings then a different approach may be warranted. 5. As far as we can see, there is no cause for applying such a different approach to the costs of the indemnity proceedings at first instance. 6. However, as appears from our reasons for decision on the substantive appeal, RFC was permitted to raise on appeal a new substantial issue, namely whether the Tribunal had jurisdiction and power to make the indemnity orders sought in view of the terms of s 274 (3) of the Australian Consumer Law (NSW) which make reference to bringing proceedings for an indemnity in a court rather than in the Tribunal. This became Ground 1A of the grounds of appeal. This was not an issue that was raised at first instance. We rejected this argument on appeal. 7. Correctly, RFC anticipated this issue in its written submissions about costs and said: 6. No allowance need be made for those appeal grounds which were not the basis for the successful appeal, namely Ground 1A. The determination of costs follow the event is generally assessed on the outcome of the proceedings as a whole (Markunsky v Zammit t/a Zammit Quality Constructions [2016] NSWCATAP 253 at [29]). Further, the question (which was the subject of ground 1A) of whether the Tribunal has jurisdiction to make orders under s 274 of the ACL, was sufficiently vexing for both the Appeal Panel and the parties that the Appeal Panel invited the Minister to intervene. The issue involves an important, but hitherto unresolved question of statutory interpretation. In those circumstances, the Appeal Panel should not discount the Manufacture's costs entitlement because that ground was not one that the Manufacturer succeeded on. 1. Although we have heard nothing from KRP about these costs questions, including whether we should accept RFC's submission against discounting its costs of the appeal, KRP has not expressed any consent to the orders sought by RFC and we must proceed to determine costs according to law as applied to the facts. 2. In Markunsky the Appeal Panel stated: [29] Second, in proceedings in which multiple issues are contested – a frequent occurrence in applications made under the Home Building Act 1989 (NSW) – 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]. But a court or tribunal may make a different order, particularly if the successful party overall raises an issue unreasonably or otherwise acts in such a manner that would make it unfair for them to receive all their costs: Rozniak v Government Insurance Office (1997) 41 NSWLR 608. More usually, however, a court or tribunal will only deprive a party successful overall of costs in relation to a particular issue when that issue was a dominant issue or clearly separable: Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15 at [64], [65]. 1. In James & Ors v Surf Road Nominees Pty Limited & Ors [No 2], referred to by the Appeal Panel in Markunsky, the Court of Appeal said: 34 Where a matter involves multiple issues and the question before the court is whether it should make some other order as to costs other than the order that costs follow the event, a distinction is commonly drawn between cases which involve clearly discrete issues for determination, and those in which all issues are inseparable, or at least sufficiently linked, with respect to the overall disposition of a particular matter. In Permanent Trustee Aust Ltd v FAI General Insurance Co Ltd (unreported, NSWSC, 3 June 1998), Hodgson CJ in Eq noted that the obvious examples of a matter involving discrete issues is one where a plaintiff makes separate claims for different relief, or a claim by a plaintiff and a cross-claim by a defendant. Another example is where a respondent is successful in having an appeal against an earlier decision dismissed, but for reasons other than those raised in the respondent's Notice of Contention. This is not to say that so-called "discrete issues", for the purposes of apportioning costs, only exist in cases where there are separate claims made within a single matter. As Toohey J stated in the passage quoted at [33] above, it can relate to "any disputed question of fact or law" before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter. 1. We consider that Ground 1A of the appeal was a clearly separable and discrete issue involving a question of statutory interpretation that was unrelated to the other substantive issues on appeal concerning the scope of the indemnity provided for in s 274 and whether the conditions for the operation of that indemnity had been satisfied. 2. Plainly, Ground 1A will have occasioned the incurring of a significant portion of the legal costs of each of the parties to the appeal. It occupied a considerable part of the time of the hearing of the appeal. At the hearing of the appeal, Counsel for KRP, made reasonably extensive oral submissions in opposition to Ground 1A. 3. The fact that it raised, as RFC submitted, a less than straightforward question of general public importance does not, in our view, alter the assessment as to who should bear the costs of the issue in the circumstances we have referred to. Rather, that assessment is founded upon the principles we have already mentioned which reflect the fairness to the respondent of adjusting the general position that the successful party should have its costs where that party has failed to succeed on a clearly separable and discrete issue that has occasioned a portion of the costs. 4. Accordingly, we consider that a substantial discount should be applied to RFC's costs of the appeal. We consider that it is in accordance with the guiding principle in s 36 (1) of the NCAT Act that we should proceed to quantify that discount rather than make an order under which it is expressed that RFC should have its costs of the appeal, less its costs of Ground 1A and that RFC should pay KRP's costs of Ground 1A, with the latter to be set off against the costs awarded to RFC. 5. As to this quantification, we note that Ground 1A was not a ground of appeal set out in the Notice of Appeal and that it was sought to be relied upon for the first time in RFC's written submissions on the appeal served some months later. In those written submissions the point was addressed, briefly, with the issues concerning the scope and application of the s 274 indemnity taking up a large part of those submissions. The issue was addressed somewhat more extensively in KRP's written submissions on appeal. At the hearing of the appeal, we estimate that the time spent on Ground 1A occupied close to one half of the half day hearing. 6. Overall, in these circumstances, we consider that a fair amount to be attributed to the costs of Ground 1A is one third of each party's costs of the appeal. 7. Accordingly, we consider that the fair and appropriate order to be made in respect of the costs of the appeal is that KRP should pay one third of RFC's costs of the appeal. 8. For the above reasons, we make the following orders: 1. A hearing with respect to the cost issues in this appeal is dispensed with. 2. The respondent is to pay the appellant's costs in the proceedings at first instance MV 19/56143, on the ordinary basis, as agreed or assessed. 3. The respondent is to pay one third of the appellant's costs of the appeal, on the ordinary 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: 02 November 2022