Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Pat Arcella and Carmen Arcella v Turrell Building Services Pty Limited Turrell Building Services Pty Limited v Pat Arcella and Carmen Arcella [2014] NSWCATCD 90 Hearing dates: 15 and 16 April 2014 Decision date: 29 May 2014 Before: S Thode, Senior Member Decision: 1.Turrell Building Services Pty Limited is to pay Pat Arcella's and Carmen Arcella's costs of both proceedings: HB 12/42741 and HB 12 /52981 on the ordinary basis as agreed or assessed. Category: Principal judgment Parties: Pat Arcella and Carmen Arcella (applicants/cross respondent) Turrell Building Services Pty Limited (respondent/cross applicant) File Number(s): HB 12/42741 HB 12 /52981 REASONS FOR DECISION The proceedings 1The applicants are the registered proprietors of premises located at Dural NSW (the owners) and brought a claim for defective building against the builder. The respondent was the builder retained to undertake renovation work. The builder filed a cross claim seeking payment of sums outstanding to him (the builder's claim). 2In 2012 the applicants commenced proceedings in the Tribunal. The proceedings were heard and finalised in 2014. The Tribunal made orders in favour of the homeowners. The builder was ordered to pay $22,034.89 to the homeowners. 3The builder's claim was dismissed. 4The homeowners submit that the builder was wholly unsuccessful and that costs should follow the event. 5The homeowners submitted they are entitled to an award of costs against the builder, the unsuccessful party. That is, the general rule applies and costs should follow the event. 6A number of concessions in respect of the defective items were belatedly made by the builder at the hearing. Until the concessions were made the homeowners rightly anticipated that they would be put to strict proof. The homeowners incurred costs in preparing for a hearing with all items in dispute. 7The builder submitted that the Tribunal must find "special circumstances" to award costs. This submission was misconceived. There is no requirement to find "special circumstances" before costs may be awarded in proceedings where the amount claimed exceeded $30,000.00. 8It was further submitted that the builder and the homeowners were each partly successful in their respective claims: "the Tribunal made a finding there was an amount due to the builder of $104,042.29 and... in relation to the homeowners claim that there was defective or incomplete work totalling $126,077.18 after the addition of builders margin of 25% and GST. The order made by the Tribunal therefore reflects a reconciliation of the amounts due and the submission on behalf of the homeowners that the builder was wholly unsuccessful is rejected." 9The builder submitted that it was substantially more successful than the homeowners as the award made reflected 11.047% of the amount claimed during the hearing. It was further submitted that the legal representation was disproportionate as the homeowners had engaged solicitor and counsel for what was a relatively straightforward case. Findings and Decisions 10This matter was determined by the Consumer, Trader and Tenancy Tribunal when the CTTT Act and the CTTT Regulation were in force. The Consumer Trader and Tenancy Tribunal was abolished as of 1 January 2014 and the CTTT Act and Regulation were repealed. As the issue of costs was not determined at the time the substantive issues were decided, the proceedings are incomplete. 11Transitional provisions in relation to part heard (that is, incomplete proceedings) are set out in Clause 7 of Schedule 1 of the NCAT Act. Pursuant to Clause 7(3), the current Tribunal has and may exercise all the functions that the CTTT had immediately before its abolition, and the provisions of the CTTT Act and Regulation continue to apply to incomplete proceedings. 12The relevant provisions in relation to costs are accordingly section 53 of the CTTT Act and in Clause 20 of the CTTT Regulation. Clause 20(4) of the Regulation states that in any proceedings in respect of which the amount claimed or in dispute is more than $30,000.00, the Tribunal may award costs "in such circumstances as it thinks fit". The amounts claimed in this case exceeded $30,000.00. 13The Tribunal therefore has a wide discretion in relation to making an order for costs. 53 Costs Subject to this section and the regulations, the parties in any proceedings are to pay their own costs. The Tribunal may, in accordance with the regulations, award costs in relation to any proceedings. If costs are to be awarded by the Tribunal in accordance with the regulations, the Tribunal may: determine by whom and to what extent costs are to be paid, and order costs to be assessed on the basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis. In this section, "costs" includes the costs of, or incidental to, proceedings. 14The relevant regulation is clause 20 of the Consumer Trader and Tenancy Regulation 2001. I have had particular regard to clause 20(4): "In any proceedings in respect of which the amount claimed or in dispute is more than $30,000 the Tribunal may award costs in relation to the proceedings in such circumstances as it thinks fit. " 15Contrary to the builder's submissions, there is no requirement to arrive at a finding of "special circumstances" before costs may be awarded in matters where the amount claimed exceeded $30,000.00. 16I reject the builder's submission that the owners were not wholly successful. 17The homeowners' evidence in respect of payments made and moneys owed under the contract were accepted and preferred over the builder's evidence in every single respect. The homeowner provided detailed evidence of reconciliation of the invoices with the mediation agreement based on Mr Arcella's sworn evidence. He was not cross-examined and the Tribunal accepted the unchallenged evidence of the homeowners. 18As a result of the persuasive evidence prepared by the homeowners as to the payments made work performed, the builder's debt claim was dismissed in its entirety. 19I further reject the builder's submissions that the Tribunal made a finding of fact that there was an amount due and owing to the builder of $104,042.29. The sum referred to was a convenient arithmetic step to arrive at contract figures. At no time did the Tribunal arrive at a finding or made an order that this was an amount payable to the builder. 20The relative success of the builder in defeating various claims for defective items was in no small measure occasioned by the concessions made at the court room door. Until the concessions were made on the morning of or shortly before the hearing, the applicants prepared the case, anticipating they would be put to strict proof on each defective item. The concessions made shortly before the hearing did little to minimise legal or expert costs. 21In Bruckner v JVZ Steel Roof (2011) NSW CTTT 382 (24 August 2011) Senior Member Meadows made an order for costs after the respondent largely succeeded against the applicant. He also found that the applicant's claim was largely misconceived even though at all relevant times the applicant had the benefit of legal advice and he considered that in accordance with principles enunciated by the P Garling J in Leslie Gaskin v Matthew Ollerenshaw (2010) NSW SC 874 there was a basis for ordering costs in accordance with the Act and regulations governing the Consumer, Trader and Tenancy Tribunal. 22Although costs are in the discretion of the Tribunal Regulation 20 creates a presumption that the costs will "follow the event", the event being a matter where the claim made exceeded $30,000. The regulation reflects the general law position that a successful party has a "reasonable expectation" of being awarded costs against the unsuccessful party: Oshlack v Richmond River Council (1998) 193 CLR 72 at [67] and [134]. The purpose of an order for costs is to compensate the person in whose favour it is made and not to punish the person against whom the order is made: Allplastics Engineering Pty Ltd v Dornoch Ltd [2006] NSWCA. 23I am satisfied that the homeowners were wholly successful in their claim against the builder, and succeeded in their claim for damages against the builder. I am satisfied that the owners were largely successful in the overall outcome of their claim. They wholly resisted a money order against them, and a not insignificant award was made in their favour. The measure of success cannot be a percentage calculation of the total claim as submitted by the builder. 24The purpose of making a costs order is to provide compensation to the party in whose favour the order is made for the expense the party has been put to in prosecuting or defending legal proceedings. In general terms, a party who is successful is entitled to an order for costs in its favour, subject to certain limited exceptions generally involving misconduct on the part of that party. (See, for example, Latoudis v Casey [1990] HCA 59; [1990] 170 CLR 534 and Oshlak v Richmond River Council [1998] HCA 11) 25The owners were substantially successful in these proceedings. There was no misconduct during the proceedings which would preclude the owner from being awarded costs on the usual basis. 26I am satisfied that the builder should also be ordered to pay the owners' costs in relation to both proceedings in which the owners were successful. 27Accordingly, I make the orders in paragraph one above. Amendment under the Slip Rule 28It is noted that order 1 published on 2 May 2014 erroneously referred to the builder as Turrells Building Services. This was a typographical error. Pursuant to section 50 of the Consumer Trader and Tenancy Tribunal Act 2001 I delete the words Turrells Building Services and insert the words Turrell Building Services Pty Limited instead. Orders 29Turrell Building Services Pty Limited is to pay Pat Arcella's and Carmen Arcella's costs of both proceedings HB 12/42741 and HB 12 /52981 on the ordinary basis as agreed or assessed. S Thode Senior Member Civil and Administrative Tribunal of New South Wales 29 May 2014 ********** 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: 21 August 2014