District Court New South Wales Medium Neutral Citation: Fransses v Sky Infrastructure Developers Pty Limited (No. 2) [2023] NSWDC 630 Hearing dates: 9, 10, 14 February 2023 Date of orders: 14 February 2023 Decision date: 14 February 2023 Jurisdiction: Civil Before: Neilson DCJ Decision: See par [12]. Catchwords: CIVIL – COSTS – Plaintiff successful against First Defendant but not against Second Defendant – Where Defendant's costs de minimis – Where proceedings were commenced in NCAT but later transferred to the District Court of NSW – When NCAT determined it had no jurisdiction to determine parts of the Plaintiff's claim. Legislation Cited: Nil Cases Cited: Nil Texts Cited: Nil. Category: Costs Parties: Plaintiff – Monica Fransses Defendant – Sky Infrastructure Developers Pty Limited Representation: Counsel: Plaintiff – Mr Wiggins, P. Defendant – Mr Baroni, M. Solicitors: Plaintiff – Sterling Legal Defendant - Joseph G Capogreco & Associates File Number(s): 2021/00028728 Publication restriction: Nil. Judgment 1. HIS HONOUR: This is the 29th year in which I shall have intoned the observation that nothing excites the zeal, the ardour and the passion of members of the legal profession more than an argument about costs. I gave a verdict and judgment for the plaintiff against the First Defendant for $265,874.26 and gave verdict and judgment for the Second Defendant against the Plaintiff. I ordered that the Second Defendant's cross-claim be dismissed. I then made certain orders as to costs but granted the parties liberty to apply for any other orders concerning costs, such application to be made at 2:00pm this day. I have now received further evidence, Exhibit Y and Exhibit 21, and have heard counsel on the question of costs. 2. The first thing to note is this, the Plaintiff commenced proceedings in the NSW Civil and Administrative Tribunal ("NCAT"). The application form was filed with the Consumer and Commercial Division of NCAT. It was filed on 28 February 2019. The applicant was the current Plaintiff. It is clear that she was the author of the application. Under the heading "Dispute Details", the following is included: "Missing money even though there is evidence that it has been received. The builder is billing me for $180,000 instead of $43,835.36 due to missing payments that has [sic] actually been received by Sky Group." 1. On 28 March 2019, the Plaintiff authorised Messrs Stirling Legal to represent her. The notice of the appointment of that firm of solicitors was received by NCAT at Penrith on 1 April 2019. On 30 April 2019, Mr Zreika of Sterling Legal filed points of claim in NCAT. It showed as the applicant the current Plaintiff; as the First Respondent the current First Defendant, as the Second Respondent, Mr Roy Maalouf, the current Second Defendant, and a Third Respondent, Cynthia Maalouf, and a Fourth Respondent, Lebnan Louis, but the names of Cynthia Maalouf as Third Respondent and Lebnan Louis as Fourth Respondent have been crossed through and, in lieu thereof, the points of claim nominated Joseph Ishak as the Third Respondent. 2. Mr Ishak was originally joined in the proceedings in this Court as the Third Defendant, but on the first day of the hearing before me, the Plaintiff discontinued her claim against Joseph Ishak on the basis that the Plaintiff was unable to prove service of the originating process of this Court upon him and was unable to prove that he was aware of the hearing listed before this Court, commencing on 17 October 2022. Under the heading "Relief claimed", the then applicant, now Plaintiff, claimed ten different heads of relief. The fifth head of relief was the sum of $29,000, being funds paid to the Second Respondent but not relayed to the First Respondent, and the sixth claim for relief was for $80,000, being funds paid to the Third Respondent but not relayed to the First Respondent. 3. On 12 July 2019, Mr Ishak filed an Amended Points of Claim. The fifth claim for relief was pleaded thus: "$35,000.00, being funds paid to the second respondent but not paid to the first respondent." 1. The sixth ground for relief was repleaded, but only by deleting the word "relayed" and inserting in lieu thereof the word "paid". It became common ground that NCAT had no jurisdiction to entertain the claims made against the Second Respondent and the Third Respondent, no matter what the cause of action may have been. In decisions made by the Tribunal, it is pointed out that the Tribunal had no jurisdiction to grant relief for tort or fraud (I assume by "fraud", what is meant is the tort of deceit). 2. NCAT also had no jurisdiction to make orders for restitution. The claims against the Second and Third Respondent appear to have been live from the time of the filing of the originating process in NCAT, the application filed by Ms Fransses on 28 February 2019. That is made clear by the originating Points of Claim and by the Amended Points of Claim. Proceedings should never have been commenced in the Tribunal. 3. The Plaintiff today makes an application for the costs that she incurred in the Tribunal and, equally, the Defendant seeks an order that the Plaintiff should pay the costs of the First and Second Defendant in relation to the proceedings in the Tribunal. One of the orders that I made on Friday 10 February 2023, was that there be no order concerning any additional cost that had been incurred by the second defendant on a basis that any such costs would be de minimis. Mr Baroni, who appears for both the First and Second Defendants asks me to set aside that order and replace it with an order that the Plaintiff pay the Second Defendant's costs. However, it still appears to me that the amount of extra work to be done on behalf of Mr Maalouf to defend the claim made against him, which ultimately was only under a common money count, would not be particularly great. 4. I should add that a costs order was made in the Tribunal but that order was limited. The order was made by Dr P Briggs, a member of the Tribunal, and according to the cover sheet of his reasons, the date of his decision was 13 November 2020, the date of his orders was 19 November 2020, but it appears that the decision itself was amended on 1 December 2020. It is clear from six of the member's reasons that the current First and Second Defendants were seeking their costs in relation to the Applicant's claim. Furthermore at [13] of his reasons, the member recorded that the First and Second Respondent's submission was that they should be awarded costs on the application to transfer the proceedings from NCAT to this Court and for costs thrown away by the transfer. 5. At [20], the member pointed out that the claim against the Second and Third Respondents "may need to be focused upon misappropriation of funds, fraudulent misrepresentation and restitution". Ultimately, at par [40], the member said this: "I choose to exercise my discretion on the basis that there has been no hearing on the merits of the real issues in dispute, and therefore, I intend to follow "the approach adopted in a large number of cases" and determine that there should be no order for costs to either of the parties in respect of the transfer application." 1. The only order actually made by the tribunal was that each party should pay her, its, or his, own costs of the application to transfer the NCAT proceedings to this Court, otherwise the costs of the NCAT proceedings are still at large. A party who takes proceedings in a court or a tribunal which does not have the jurisdiction to hear and determine the dispute or the whole of the dispute runs the risk of incurring costs because of seeking to litigate a matter in the wrong tribunal or court. The Plaintiff made that decision and persisted with it from the original application made on 28 February 2019 up until the costs order was made by Tribunal Member Briggs on or about 19 November 2020. 2. I have decided that the appropriate orders to make are these: 1. I set aside the orders for costs made on 10 February 2023. In lieu thereof: 1. I order the Plaintiff to pay the costs of the first and Second Defendant in NCAT; 2. I order the First Defendant to pay the Plaintiff's costs of the proceedings in this Court, including the Plaintiff's cost of defending the First Defendant's cross-claim; 3. I order the plaintiff to pay the second defendant's costs of these proceedings, which I assess at $3,000; 4. The Plaintiff's costs in order (b) are to include the Plaintiff's costs of obtaining evidence in NCAT, for example costs of qualifying expert evidence and obtaining an expert's report, costs of interviewing witnesses and obtaining statements from them which form the basis of affidavits sworn in these proceedings; and 5. The Plaintiff's application for a Sanderson order is refused. ……. 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: 10 May 2024