Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Kevin Pavert and Liz Pavert v Reward Homes Pty Ltd [2014] NSWCATCD 241 Hearing dates: Decided on the papers Decision date: 11 December 2014 Jurisdiction: Consumer and Commercial Division Before: R F Buckley, Senior Member Decision: Each party is to pay their or its own costs of the application Catchwords: Unfettered discretion Intransigent position of both parties Legislation Cited: Consumer Trader & Tenancy Tribunal Act 2001 (NSW) repealed Consumer Trader & Tenancy Tribunal Regulation 2009 (NSW) repealed Uniform Civil Procedure Rules 2005 Cases Cited: Oshlack v Richmond River Council [1998] HCA 11 Wright v Foresight Constructions Pty Limited [2011] NSWCA 327 Elite Protective Personnel Pty Ltd & Anor v Salmon (No 2) [2007] NSWCA 373 Category: Costs Parties: Kevin Pavert and Liz Pavert (applicants) Reward Homes Pty Ltd (respondent) Representation: The decision was concluded in chambers Solicitors-Michael Atkinson and Associates-for the applicants Prime Lawyers – for the respondent File Number(s): HB 13/04117 Publication restriction: Unrestricted reasons for decision BACKGROUND 1. The substantive application was the subject of Orders and Reasons published on 2 September 2014. 2. There is no dispute that the amount in issue with respect to the application exceeded $30,000.00. The application, as formulated immediately before the start of the proceedings on 22 October 2013, contained claims amounting to $161,648.38 made up as follows: 1. $93,160.38 for building defects; 2. $59,648.00 for consequential financial losses; and 3. $8,840.00 for liquidated damages 1. At the commencement of proceedings, the applicants withdrew their claim for financial loss. After three days of hearing and lengthy detailed submissions from both parties, the eventual outcome of the application was that the respondent builder was ordered to pay the applicants the amount of $17,278.00. 2. The legislative and regulatory basis of any award of costs is governed in the context of both applications by s.53 of the Consumer, Trader and Tenancy Tribunal Act 2001(NSW)(repealed)(the CTTTA), and Reg. 20 of the Consumer, Trader and Tenancy Tribunal Regulation 2009(NSW)(repealed)( the CTTTR). 3. Relevantly, s.53 of the CTTTA is in the following terms: "53 Costs (1) Subject to this section and the regulations, the parties in any proceedings are to pay their own costs. (2) The Tribunal may, in accordance with the regulations, award costs in relation to any proceedings. (3) If costs are to be awarded by the Tribunal in accordance with the regulations, 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. (4) In this section, "costs" includes the costs of, or incidental to, proceedings. (5) This section does not apply in relation to proceedings under the Strata Schemes Management Act 1996 or the Community Land Management Act 1989 " (emphasis). 1. It should be noted at this point that sub-section 53(1) of the CTTTA provides a different presumptive starting point than does Reg. 42.1 of the Uniform Civil Procedure Rules 2005 which by comparison is in the following terms: "42.1 General rule that costs follow the event (cf SCR Part 52A, rule 11) Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs" (emphasis). 1. The determination of any costs entitlement does not follow the formula outlined in the UCPR as frequently enunciated by way of a general rule in Oshlack v Richmond River Council [1998] HCA 11 at [67 – 69] per comments of McHugh J with whom Brennan CJ agreed. 2. Reg. 20 of the CTTTR is in the terms set out below. Reg 20(4) is apposite to the present circumstances. It is a wide discretion, and allows the Tribunal to award costs, "…in such circumstances as it thinks fit." "20 Costs generally (1) This clause applies to the awarding of costs by the Tribunal as provided by section 53 of the Act. (2) The Tribunal may award costs in relation to proceedings in respect of which the amount claimed or in dispute is not more than $10,000, or in respect of which no amount is claimed or in dispute, only if the Tribunal is satisfied that there are exceptional circumstances that warrant the awarding of costs. (3) In any proceedings in respect of which the amount claimed or in dispute is more than $10,000 but not more than $30,000, the Tribunal may award costs in relation to the proceedings only if: (a) the Tribunal is satisfied that there are exceptional circumstances that warrant the awarding of costs, or (b) the Tribunal has made an order under section 30 (2) of the Act in relation to the proceedings. (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. (5) Despite any other provision of this clause, the Tribunal may order: (a) that the costs of proceedings on an application for rehearing of a matter are, if the applicant fails to attend the hearing of the application, to be paid wholly or in part by the applicant, or (b) that the costs of any proceedings that the Tribunal considers to be frivolous, vexatious, misconceived or lacking in substance, or that otherwise should not be heard or proceeded with, be paid wholly or in part by the person who instituted the proceedings. (6) The amount of any costs under subclause (5) is to be substantiated in accordance with directions given by the Chairperson or, in the absence of such directions, in such manner as the Tribunal thinks fit." 1. The nature of the Tribunal's discretion was the subject of comment of Basten JA in Wright v Foresight Constructions Pty Limited [2011] NSWCA 327 where at [36] His Honour stated as follows:- "The general rule in the Tribunal is that each party is to pay its own costs, subject to the regulations: Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) ("the CTTT Act "), s 53(1) and (2). The Tribunal referred in its second reasons to its jurisdiction under the Consumer, Trader and Tenancy Tribunal Regulation 2009 ("the CTTT Regulation"), cl 20(4). That provision permitted the Tribunal, in any proceedings in respect of which the amount claimed or in dispute was more than $30,000 to award costs "in relation to the proceedings in such circumstances as it thinks fit". A power conferred in these terms is "unfettered" in the sense that the Tribunal may make such order as it thinks appropriate, so long as it acts in accordance with the subject matter, scope and purpose of the power. In relation to the award of costs in litigation, the accepted purpose is, where costs are awarded in favour of one party, to compensate that party for the expense incurred in respect of the litigation. (In respect of smaller claims, the power of the Tribunal to award costs is constrained, for example by a requirement that there be "exceptional circumstances": cl 20(2) and (3).)" SUBMISSIONS 1. In summary the applicants contend that the respondent should be ordered to pay the applicants' costs on the basis that costs follow the event. Moreover, it is submitted that the applicants were, at all times, compelled to litigate their dispute by reasons of the actions and stance adopted by the respondent. 2. It is put that a proposal was put by the respondent, in the nature of a Calderbank offer on 20 September 2013 in which it offered an amount of $10,000.00 with each party to pay its own costs. It is further submitted that the respondent's position, based upon the expert evidence of Mr Irvine, did not alter from the commencement of the proceedings through until the respondent's final submissions in which it was submitted that the only concession made by the respondent was in regard to one item in which it allowed an amount of $1,000.00 plus GST. 3. The respondent submits that what was a total claim of some $161,648.38 before the commencement of the proceedings, after three days of hearing resulted in an award of only $17,278.00, which would indicate that, in such circumstances, the respondent was the successful party and that costs should follow that conclusion. 4. Counsel for the respondent correctly concedes that a successful party "will only be deprived of the costs relating to an issue on which it lost when that issue was clearly dominant or separable". Further, it is conceded that the exercise of a discretion as to whether there is a clearly dominant issue or a mixed outcome "depends on matters of impression and evaluation"; see comments of the court at [6] and [11] in Elite Protective Personnel Pty Ltd & Anor v Salmon (No 2) [2007] NSWCA 373. CONSIDERATION 1. The subject litigation, from shortly before the hearing commenced, was a contest of intransigence, between one party that was always right and the other that was never wrong. 2. The respondent's position compelled the applicants to proceed. Their position in turn presented the respondent with no alternative but to partake in a litigious battle. The applicants maintained a significant part of their claim, which was clearly untenable, until the opening words were spoken on the first day of the hearing. 3. The discretion of the Tribunal to award costs, "in such circumstances as it thinks fit" is unfettered. The starting point is not as set in the UCPR. 4. I am of the view that the issues, involving in effect a separate contested adjudication of some 32 alleged defective items of building work, all of which were linked not only by the parties, but by the expert evidence adduced by them, do not create the circumstances allowing for separate costs orders relevant to the specific findings for each item. This matter is unlike the costs evaluation in Elite Protective Personnel, in which separate grounds of appeal could be identified as being completely untenable as and from the commencement of the proceedings. 5. Having regard to the circumstances and history of the application, the disposition and hearing of the dispute and final outcome, I am of the view that the appropriate order is that each party is to pay their or its own costs. R F Buckley Senior Member Civil and Administrative Tribunal of New South Wales 11 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