Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Miguel Ocana and Johanna Ocana v Roche Constructions Pty Ltd [2014] NSWCATCD 231 Hearing dates: 11 and 12 February 2014 Decision date: 02 December 2014 Jurisdiction: Consumer and Commercial Division Before: N Correy, Senior Member Decision: That Miguel Ocana and Johanna Ocana pay to Roche Constructions Pty Ltd the sum of $20,596.00 with respect to costs within 28 days of the date of this order Legislation Cited: Civil and Administrative Tribunal Act 2013 (the CAT Act ) Civil and Administrative Tribunal Rules 2014 (the CAT Rules) Consumer Trader and Tenancy Tribunal Act 2001 (the former Act)l Consumer Trader and Tenancy Tribunal Regulation 2009 ( the former regulation) Cases Cited: Oshlack v Richmond River Council (1998) 192 CLR 72 Latoudis v Casey 1990 HCA 59 Category: Costs Parties: Miguel and Johana Ocana (applicants) Roche Constructions Pty Ltd (respondent) Representation: There are no submission on costs from the applicants; Mark Smith Solicitor has made written submissions for the respondent File Number(s): HB 13/35326 Publication restriction: Nil reasons for decision JURISDICTION IN RELATION TO COSTS 1. The Tribunal derives its jurisdiction pursuant to the transitional provisions contained in Schedule 1 of the CAT Act which provides that in determining this matter, because it is a pending claim which was unheard under the former Tribunal, the Tribunal should treat it as having been commenced under the CAT Act. 2. The relevant provisions of the CAT ACT which govern this determination are Section 60 and Rule 38 of the CAT Rules. BACKGROUND 1. On 10 June 2014 this Tribunal made an order dismissing the applicants' claim which had sought an order that they be compensated for the cost of demolition and rebuilding of the extensions and renovation carried out by the respondent. It was further ordered that the respondent file submissions on costs by 6 July 2014 and the applicants' reply submission by 3 August 2014. 2. The submission from the respondent is dated 4 July 2014 although not date stamped in the Tribunal registry until 7 July 2014, technically 1 day late .There has been no submission received on costs from the applicants. THE RESPONDENT SUBMISSION 1. The respondent's submission is not greatly helpful in articulating the basis upon which it should be entitled to an order for costs against the applicants. It relies on the costs provisions of the CAT Act 2013 and Rules but in the alternative cites Clause 20 of the former Regulation in the event that it is considered relevant. The circumstances summarised in paragraph 6 below are impliedly submitted on the basis that they establish a case for "special circumstances" to overcome the general rule in that each party is to bear its own costs. Although CAT rule 38 is referred to in the submission the basis of reliance upon it is not explained. 2. The submission revisits the applicants' lack of evidence to establish the relief that had been sought by them, seemingly relying on the findings as were subsequently determined being consistent with such lack of evidence. It also relies on the fact that an earlier agreement to settle involving a payment by the applicant of $11,500.00 in return for the works being rectified /completed by the respondent had broken down following upon which the current claim for a sum of $268,800.00 had arisen . Such a significantly increased claim the respondent argues required "thorough analysis and supporting evidence" to contest". The respondent says that the most contentious part of the applicants claim with respect to demolition "could have been entirely avoided because it was clear on the applicants' evidence there was insufficient evidence to support such an extraordinary claim". It submits that had the applicants not pursued such a claim it was likely the issues could have been resolved. 3. The respondent seeks costs of approximately $40,000.00 comprising the solicitors professional fees of $15,136.00 and expert witness costs of $5,400.00 .It also seeks reimbursement of time lost by Mr Roche and his wife in relation to this litigation , totalling $19,700.00 . There is no evidence independently substantiating the basis upon which the latter figure could be justified other than the assertion that Mr Roche's day rate is$1,500.00 and that of Mrs Roche is $880.00 . THE APPLICABLE LAW 1. The relevant provisions are not expressed in the respondent's submissions but it is necessary to outline them for an understanding of the basis for this decision .The proceedings in this matter were commenced under the former Act but were heard only in February 2014 .Pursuant to Sub Clause 7(1) of Schedule 1 of the CAT Act such proceedings should be treated as "unheard proceedings" and thus fall to be determined as if commenced under The CAT Act consistent with Clause 7(1) which states as follows : (1)Unheard proceedings in an existing tribunal are taken, on and from the establishment day, to have been duly commenced in NCAT and may be heard and determined instead by NCAT. 1. The costs provisions of the CAT Act relevantly are 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. (4) If costs are to be awarded by the Tribunal, the Tribunal may: (a) determine by whom and to what extent costs are to be paid, and (b) 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. (5) In this section: "costs" includes: (a) the costs of, or incidental to, proceedings in the Tribunal, and (b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal. 10 The CAT Rules relevantly 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: (a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10 (2) of Schedule 4 to the Act in relation to the proceedings, or (b) the amount claimed or in dispute in the proceedings is more than $30,000. CONSIDERATION AND DECISION 1. The respondent relies on the matters raised in its submissions as sufficient basis to establish an entitlement to an award of costs under Section 60 (3) on the basis that special circumstances are established so as to render its claim for costs a valid one and falling outside the general rule that each party should bear its own costs as expressed in section 60 (1) . 2. I find that the matters raised by the respondent do provide cogent reasons for arguing that this is a proper case for it to be determined that special circumstances exist. However given the amount in dispute it is not essential to determine the existence of special circumstances having regard to CAT Rule 38(2)(b) as set out above . The applicants' claim in this matter was for $268,000.00 and no alternative relief was sought and therefore since the amount in dispute is well above the threshold the Tribunal has discretion to award costs as it sees fit subject to the relevant principles established with regard to the awarding of costs. 3. The general rule expressed in Oschlack V Richmond River Council (1998)CLR 72 McHugh J, is that a successful party has a reasonable expectation of being awarded costs against the unsuccessful party . 4. In exercising the Tribunal's discretion in these circumstances the usual principles that should be exercised in relation to costs are : 1. Costs should follow the event 2. The purpose of a costs order is to compensate or indemnify a successful party against the expenses to which it has been put .(Latoudis V Casey 1990 HCA 59 ) 1. Review of the tax invoices submitted by the respondent's solicitors indicates that the work in respect to which the invoices relate appears to be reasonable having regard to the nature of the work required in a matter of this type. However the invoices as presented include amounts for GST which is not a recoverable expense against the applicants. There is also some component of solicitor/client costs in the total amount claimed and since I do not consider there should be an award of costs on an indemnity basis some reduction to the total to account for such component is required. It is appropriate to reduce the professional costs figure of $13,760.00 net of GST by 15% to account for the solicitor client component in this instance. The resulting figure is thus $11,696.00. 2. The full cost of the expert should be allowed as a reasonable party/party expense in the sum of $5,400.00. 3. The claim for the losses alleged by Mr and Mrs Roche are not substantiated or explained to any satisfactory extent. I consider that some allowance during the two days of the contested hearing is reasonable but the claim for loss in respect of twelve days is not considered reasonable. I find an amount of $3,500.00 appropriate with respect to this aspect. 4. I therefore assess the total costs payable on a party and party basis including disbursements in the sum of $20,596.00. N Correy Senior Member Civil and Administrative Tribunal 2 December 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: 12 February 2015