Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Hawach v A & A Building Services Pty Ltd (No 2) [2024] NSWCATAP 234 Hearing dates: On the papers Date of orders: 19 November 2024 Decision date: 19 November 2024 Jurisdiction: Appeal Panel Before: G Sarginson, Deputy President D Robertson, Principal Member Decision: (1) An oral hearing on the issue of costs is dispensed with under s 50(2) of the Civil and administrative Tribunal Act 2013 (NSW). (2) The appellants, Joseph Hawach and Sarah Reimers, are to pay the costs of the respondent A & A Building Services Pty Ltd of the appeal proceedings as agreed or assessed on the ordinary basis. Catchwords: COSTS – rr 38 and 38A Civil and Administrative Tribunal Rules 2014 (NSW) – respondent the successful party in the appeal – costs follow the event Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 (NSW) Cases Cited: G R Vaughan (Holdings) Pty Ltd v Vogt [2006] NSWCA 263 Hanave Pty Ltd v Wine Nomad Pty Ltd; Wine Nomad Pty Ltd v Hanave Pty Ltd (No 2) [2022] NSWCATAP 361 Hawach v A & A Building Services Pty Ltd [2024] NSWCATAP 138 Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (No 2) [2011] NSWCA 171 Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15 Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Promina Design & Construction Pty Ltd v The Owners-Strata Plan No 97449 (No 4) [2023] NSWCATAP 338 The Owners-Strata Plan No 63731 v B & G Trading Pty Ltd (No 2) [2020] NSWCATAP 273 Texts Cited: None cited Category: Costs Parties: Joseph Hawach (First Appellant) Sarah Reimers (Second Appellant) A & A Building Services Pty Ltd (Respondent) Representation: Counsel: M Klooster (Appellants) F Clark (Respondent) Solicitors: G & S Law Group (First and Second Appellants) A Plus Legal (Respondent) File Number(s): 2023/00222011 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not Applicable Date of Decision: 13 June 2023 Before: D Goldstein, Senior Member File Number(s): 2021/00387559 (formerly HB 21/32175) REASONS FOR DECISION 1. This is a costs application arising from the substantive decision dated 19 July 2024 (Hawach v A & A Building Services Pty Ltd [2024] NSWCATAP 138). 2. This costs decision is to be read in conjunction with the substantive decision. 3. In the substantive decision, the Appeal Panel refused leave to appeal and dismissed the appeal. The decision contained a timetable for the filing and serving of costs submissions. 4. The respondent filed a costs application containing written costs submissions authored by Ms Clark of Counsel. Those costs submissions are dated 2 August 2024. 5. No costs submissions were filed by the appellants. This costs decision is made on the basis that the respondent's costs application and submissions was duly served on the Solicitor for the appellants in accordance with the procedural directions contained in the substantive decision. 6. Paragraphs [11]-[57] of the substantive decision set out the background to the dispute and the decision of the Tribunal the subject of the appeal. In summary, the owners sought damages of approximately $95,000 for the cost of rectifying allegedly defective residential building work and the provision of trade certificates. The respondent sought a set off for the amount that it alleged was owed by the appellants. There was a significant dispute in the proceedings as to whether the appellants were engaging contractors directly in the capacity of an owner/builder; or whether they had engaged the respondent as builder and it was the respondent who was engaging contractors. 7. The Tribunal found that most of the works were engaged directly by the appellants and a limited amount of work was performed by the respondent. There had also been an arrangement between the parties where the appellants used the respondent's trade account to acquire building materials and had not reimbursed the respondent. 8. The Tribunal found that the appellants owed monies to the respondent in respect of the building materials. After setting off the amount to rectify defective work performed by the respondent with the amount the appellants owed the respondent, the proceedings of the appellants was dismissed. 9. The appellants lodged an appeal from the Tribunal decision and, for the reasons set out in the substantive decision, failed on all grounds of the appeal. 10. We are satisfied that it is appropriate to determine the issue of costs on the basis of the written submissions provided and dispense with an oral hearing under s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act). Applicable Costs Principles 1. Under s 60(1) of the NCAT Act, parties are to bear their own costs of the proceedings, unless "special circumstances" are established under s 60(2) of the NCAT Act. The matters for consideration as to whether or not "special circumstances" are established are set out in s 60(3) of the NCAT Act. 2. If the provisions of ss 60(1)-(3) of the NCAT Act apply, it must be determined (a) whether there are "special circumstances" and (b) whether those "special circumstances" are sufficient to exercise the discretion to depart from the usual position under s 60(1) that a party bears its own costs, such that a costs order should be made in favour of a party. Applicable principles are discussed in The Owners-Strata Plan No 63731 v B & G Trading Pty Ltd (No 2) [2020] NSWCATAP 273 at [5]-[15]). 3. An exception to ss 60(1) and (2) of the NCAT Act is contained in r 38 and r 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules). Those provisions are as follows: 38 Costs in Consumer and Commercial Division of the Tribunal (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 … (b) the amount claimed or in dispute in the proceedings is more than $30,000. 38A Costs in internal appeals (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. The operation of r 38 and r 38A of the NCAT Rules is a two-step process. Firstly, the amount claimed or in dispute in the proceedings under appeal must have exceeded $30,000. Secondly, the amount claimed or in dispute in the appeal itself must have exceeded $30,000. Both steps must be satisfied for the appeal costs determination not to involve consideration of whether "special circumstances" are established under ss 60(2) of the NCAT Act (Promina Design & Construction Pty Ltd v The Owners-Strata Plan No 97449 (No 4) [2023] NSWCATAP 338 at [10]-[18] and the authorities cited therein). 2. In this matter, we are satisfied that by reason of r 38A of the NCAT Rules, the respondent does not have to demonstrate 'special circumstances' under s 60(2) of the NCAT Act to obtain a costs order. The amount claimed or in dispute in both the Tribunal proceedings at first instance and in the appeal proceedings exceeded $30,000 (Hanave Pty Ltd v Wine Nomad Pty Ltd; Wine Nomad Pty Ltd v Hanave Pty Ltd (No 2) [2022] NSWCATAP 361 at [50]-[61]). 3. Accordingly, the general principle that costs follow the event and that the successful party should be awarded costs to compensate it for successfully prosecuting or defending the proceedings (depending upon the particular outcome) applies, unless there is some appropriate basis for departing from that principle (Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [67], [134]; Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164 at [25]. 4. Appropriate circumstances to depart from the general principle include (but are not limited to) the award of proportionate costs due to the successful party being unsuccessful on separable issues (Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15 at [63]–[66]); or the successful party has engaged in disentitling conduct (G R Vaughan (Holdings) Pty Ltd v Vogt [2006] NSWCA 263 at [16]-[20]); or the successful party only obtains nominal damages (Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (No 2) [2011] NSWCA 171 at [14]); or the successful party unreasonably refused a Calderbank offer (Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [8]). 5. The submission of the respondent is simple. It was the successful party in the appeal; and there is no reason to depart from the general principle that the appellants should pay the respondent's costs of the appeal. By reason of the appellants' failure in the appeal, they also failed to overturn the costs order made by the Tribunal in the proceedings at first instance. No order is sought for costs on an indemnity basis. 6. We accept that submission. The respondent was the successful party, noting that the appellants failed on all of their 8 grounds of appeal on an error on a question of law, and their application for leave to appeal (grounds 9 and 10). The respondent is entitled to a costs order in the appeal proceedings in those circumstances and there is no basis for departing from the general principle. As the appeal failed, the Tribunal costs order at first instance is undisturbed. Our role is to deal with the issue of costs in the appeal. ORDERS 1. An oral hearing on the issue of costs is dispensed with under s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW). 2. The appellants, Joseph Hawach and Sarah Reimers, are to pay the costs of the respondent A & A Building Services Pty Ltd of the appeal proceedings as agreed or assessed on the ordinary basis. ********** 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: 19 November 2024