Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Vineet Wadhera & Arti Wadera v Marwan Chafei [2014] NSWCATCD 112 Hearing dates: Submissions, 6 May 2014 Decision date: 27 June 2014 Before: P J Briggs, General Member Decision: 1.The respondent is to pay the applicant's costs as agreed or assessed in accordance with Division 11 of Part 3.2 of the Legal Profession Act 2004 Catchwords: Costs, usual order, exceptional circumstances Legislation Cited: Home Building Act 1989 Home Building Regulations 2004 Cases Cited: Butler v Bounty Group Pty Ltd (Home Building [2011] 88 (10 March 2011) Wright v Forsyth Constructions Pty ltd [2011] NSWCA 327 IPM Pty Ltd v Consumer, Trader & Tenancy Tribunal [2008] NSWSC 928 Slacks v Richmond River Council [198] HCA11193 CLR 72 Legal Profession Act 2004 Texts Cited: Building Disputes & the Home Building Act 1989 (NSW), Bambagiotti.P, 2012 Thompson Reuters Category: Principal judgment Parties: Vineet and Ari Wadhera (applicants) Marwan Chafei (respondent) Representation: Maccallum Lawyers for V and A Wadhera Marwan Chafei - Self Represented File Number(s): HB 12/59894 Publication restriction: Unrestricted / Nil reasons for decision 1Vineet and Arti Wadhera purchased a residential property in Leichhardt from Marwan Chafei in December 2010. The residence had been constructed during the period 2005 to 2009 by Mr Chafei, an Owner Builder. 2On 9 November 2005 Mr Chafei obtained an Owner Builder Permit No. 301448P from the Office of Fair Trading which allowed him to construct the approved dwelling. 3On 27 January 2010 QBE Insurance issued an Home Warranty Insurance Certificate in relation to the residence. The certificate identified the single dwelling work carried out by "Owner Builder Marwan Chafei." 4Mr and Mrs Wadhera sought, and were awarded damages for defective building work carried out by the Owner Builder by determination handed down on 22 April 2014. 5No orders were made as to costs subject to the parties being afforded the opportunity to make submissions within 14 days of the date of publications of the substantive orders. 6Mr Chafei made no submissions but Mr and Mrs Wadhera, through their solicitor submitted that a costs order should be made in their favour, siting Butler v Bounty Group Pty Ltd NSWCTTT 88 (10 March 2011) as authority for the orders sought. Mr & Mrs Wadhera's Submissions 7Mr and Mrs Wadhera rely upon a chronology which was considered in the principal judgement. 8They then submit, based upon the decision in Bounty that costs should follow the cause and that the consequence of that should result in an Order to the effect that Mr Chafei pay the applicants' costs as agreed or assessed. Mr Chafei's Submissions 9Mr Chafei made no submissions. Reasons for Decision 10The award, or decision not to award costs in the Tribunal was at the time of this application governed by s 53 of the CTTT Act and Pt 5 cll 19-21 of CTTT Regulation 2009. 11The principal presumption is that parties to proceedings are to bear their own costs (s 53 (1)). 12The authorities however, have recognised that the Tribunal has a very wide discretion which it must exercise judicially. (Wright v Forsyth Constructions Pty ltd [2011] NSWCA 327 at [36] per Basten JA.) 13Although there is an "exceptional circumstances" constraint in respect of costs where the amount claimed is $10,000.00 or less, there is no such constraint in respect of claims, such as in this case, where the sum claimed is $30,000.00 or greater. 14The breadth of the costs jurisdiction of the Tribunal was addressed in IPM Pty Ltd v Consumer, Trader & Tenancy Tribunal [2008] NSWSC 928 February 2008) per Malpass AsJ, as he then was, where at [34] His Honour referred to the requirement that the discretion to award costs be exercised "judicially" required that "the relevant circumstances of the particular case" be considered in order that "...the dictates of justice were best served" and that "...other cases provide useful guidance only" and "the exercise of judicial discretion should not be trammelled by judge made rigid formulae". 15Philip Bambagiotti in Building Disputes & the Home Building Act 1989 (NSW) at p205 has suggested that it would be a mistake to assume that the Tribunal makes costs orders in the same way as the court. It appears that this application is made on the basis that the general rule that requires the unsuccessful party to pay the costs of a successful party, should apply, irrespective of the surrounding circumstances. 16I note that the case sited by the applicant, Butler v Bounty Group Pty Limited, is distinguishable from the present matter insofar as the amount claimed or in dispute was more than $10,000.00 but less than $30,000.00. It was therefore necessary for the learned member to determine whether exceptional circumstances arose that warranted the award of costs. 17In this application the initial claim was of the order of $34,000.00, rising to $83,000.00 to $192,000.00 ultimately resulting in an award of $105,473.50. 18The purchasers of the dwelling, Mr and Mrs Wadhera were aware of some defects in the dwelling at the date of purchase but I found that in some instances the consequences of the known defects could not be predicted by lay persons who had been guided in their decision to purchase by the insurance assessment provided by Mr Scott. 19Both parties have shown some disinclination to meet the Tribunal's directions, particularly Mr Chafei, although he is correct in his submission in relation to the primary claim that the parameters of the claim changed several times during the interlocutory period of a claim that has been before the Tribunal since February of 2013. 20In: Slacks v Richmond River Council [198] HCA11193 CLR 72 McHugh J with whom Brennan CJ agreed at [96]-[97] explained the traditional principles governing the court's jurisdiction to make orders for costs as follows; "By far the most important factor which courts have viewed as guiding the exercise of the cost discretion is the result of the litigation. A successful litigant is generally entitled to an award of costs...the expression the 'usual order as to costs' embodies the important principle that subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates when the unsuccessful party is the Plaintiff or the Defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of cost is to indemnify the successful party" 21Mr Chafei has been unrepresented in the proceedings although a strong recommendation was made to him at the first directions hearing that it would be in his interests to take some advice on his response to the claim brought against him. Had he done so, the matter might have resolved earlier and at less cost to Mr and Mrs Wadhera and probably at less financial and emotional cost to Mr Chafei. 22Having considered all of the circumstances pertaining to the claim, the authorities and the manner in which it was conducted, I find that the interests of justice would be best served by an order that the respondent is to pay the applicant's costs as agreed or assessed. Phillip J Briggs General Member Civil and Administrative Tribunal of New South Wales 27 June 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: 04 September 2014