Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Christopher L Jones and Brigitte Letzbor v Rod Dempsey [2014] NSWCATCD 178 Hearing dates: On the papers Decision date: 18 September 2014 Before: S F Smith, General Member Decision: 1. Interlocutory application dismissed. Catchwords: Cost; 'special circumstances' Legislation Cited: Civil and Administrative Tribunal Act 2013 Cases Cited: Megna v Marshall [2005] NSWSC 1326; Fiduciary Ltd v Morningstar Research Pty Ltd (2002) NSWLR 1 Texts Cited: None Category: Principal judgment Parties: Christopher L Jones and Brigitte Letzbor (applicants) Rod Dempsey (respondent Representation: None Panwar Legal of Terrigial for applicants; Messrs Elsworthy, The Junction for respondent File Number(s): HB 13/29738 Publication restriction: Unrestricted reasons for decision APPLICATION 1This was an application for interlocutory orders in favour of the respondent for costs in a home building matter filed on 28 May 2013. As filed the application sought compensation of some of $268,000 for alleged defects in a dwelling house in Terrigal. The home had been built by the respondent on an owner builder's permit. Most of the alleged defects seem to relate to water proofing issues. HISTORY 2The matter had been listed for directions on seven (7) occasions by telephone or otherwise between later June 2013 and the end of August 2014. 3Mr Dempsey works in PNG and has often been out of the country. Early in the piece the applicants were represented and the respondent was not. However in August 2013 the instructions of the applicants' solicitor ceased but in March 2014 they instructed new legal advisors who still act. 4Also in about March 2014 the respondent instructed solicitors. 5On 4 June 2014 there was a hearing before Senior Member Vrabac. I discern from the file that several matters were discussed including a conclave of experts and that the respondent's solicitor foreshadowed an application for cost thrown away by the way the way the applicants had conducted their case. 6The learned Senior Member ordered that the parties file written submissions on the costs question which both of them did. Consequently the matter came on for determination before me on 29 August 2014. SUBMISSIONS Respondent 7On behalf of Mr Dempsey my attention was drawn to section 60 Civil and Administrative Tribunal Act 2013 which empowers the Tribunal to award costs in certain circumstances. The relevant parts read as follows: 60 Costs (1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3), (g) any other matter that the Tribunal considers relevant. 8It was the respondent's case that there were special circumstances and the submissions pointed to aspects of the conduct of the case which were said to invoke the discretion in each of s 60(3)(a) to (g) as reproduced above. 9It must be remarked that some features of the conduct of the litigation were referred to under more than one subsection but some of them included: * a failure to retain independent experts * Mr Jones' use of himself as an expert * fluctuating quantum of the claim * delay in finalising evidence * the inclusion of minor defects * flooding the respondent with emails (about 20 were noted) * failure to concentrate on the "real issues". 10The claim for costs was quantified at over $25,000 including (in round figures) $17,000 for solicitor's fees and nearly $9,000 for expert reports. Applicants 11Mr Singh-Panwar for the applicants filed a submission in reply. He took issue with many of the factual assertions in Mr Elworthy's document and made two broad points about the application. 12These were, firstly, that the general position relating to costs is set out in s 60(1) - each party is to pay their own- and that the interlocutory application is premature in that no factual issue has been decided by the Tribunal. 13Mr Singh referred to Megna v Marshall 1 ([2005] NSWSC 1326 at 27), a defamation case where costs were denied following a jury finding but before considering defences and quantum but it was not of much assistance. He also cited Fiduciary Ltd v Morningstar Research Pty Ltd 2 ([2002] 55 NSWLR 1 at page 3) dealing with whether or not cost should be made payable forthwith or at the end of the proceedings. Again this was not on the point before me and of little assistance save that it reviewed some general principle dealing with costs. 14I think there is much force in both of the broad points made by Mr Singh. For Mr Elworthy to succeed I think he would have to establish that there were "special circumstances" which justified a costs order where the statue contemplates that the usual rule is that each party pay their own. Changes to the details of the claim, delay in furnishing reports and doubtful admissibility of evidence are normal occurrences in civil litigation and their mere existence does not amount to "special circumstances". To qualify there must be something out of the ordinary and that something must justify a departure from the usual rule. Although the application refers to various annoying features of the way the matter has been conducted, none of it is "special" nor does its nature and quality justify overturn the "no costs" principle. 15I am also inclined to the view that the application is premature. At the present stage of the cause there has been no conclave, no Scott Schedule has been prepared, more evidence might be filed, although material is on file, nothing has been accepted into evidence or for that matter nothing has been rejected as inadmissible. 16At this stage no one has any idea as to which party is going to succeed on which issue. The basis of this interlocutory application for costs is inevitably that of 'costs thrown away'- that is cost incurred unnecessarily due to the act, neglect or default of the other party. The problem is that it is just too early to know what costs have been wrongly incurred when all factual and legal issues are still undetermined. CONCLUSION 17Having carefully reviewed the material put before me, I am not satisfied that an order for costs should be made in favour of the respondent at this stage of the proceedings. 18In particular I am unable to conclude that Mr Dempsey has satisfied the "special circumstances" test of s 60 and I also find that it would be inappropriate to make any costs order at this stage of the proceedings. 19As a result I dismiss the interlocutory application. 20In my opinion consideration of the costs question should abide the outcome of the case itself. 21Should the costs issue come to formal assessment I think the costs of this application should be awarded in favour of the substantive applicant. ORDERS 1. Interlocutory application dismissed. S F Smith General Member Civil and Administrative Tribunal of New South Wales 18 September 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: 20 November 2014