Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Turan Hasan & Inver Kapuraya v Pirasta Pty Ltd [2015] NSWCATCD 2 Hearing dates: Heard on the papers Date of orders: 14 October 2014 Decision date: 13 January 2015 Jurisdiction: Consumer and Commercial Division Before: D. Goldstein, Senior Member Decision: Turan Hasan & Inver Kapuraya must pay Pirasta Pty Ltd's costs of these proceedings such costs, if not agreed, to be assessed on the basis set out in Division 11 of Part 3.2 of the . Catchwords: Costs Legislation Cited: Civil and Administrative Tribunal Act 2013, Civil and Administrative Tribunal Rules 2014, Retail Leases Act 1994. Cases Cited: Oshlack v Richmond River Council (1998) 193 CLR 72, Rucom Pty Ltd and Anor v Multiplex & Ors [2010] NSWADT 1, Young v Young [1998] 2 FLR 1131, 1140 Texts Cited: None Cited Category: Costs Parties: Turan Hasa & Inver Kapuraya (applicants) Pirasta Pty Ltd (respondent) Representation: Counsel: Mr A. Cornish for the respondent Solicitors: Turks Legal for the respondent File Number(s): COM 14/15733 Publication restriction: Unrestricted Judgment 1. In these proceedings orders made on 14 October 2014 dismissed the applicants' case. 2. Orders were made for the parties to file and serve submissions on the question of costs. The parties have provided submissions in accordance with the orders that were made. 3. The respondent being the successful party in the proceedings seeks orders for costs in its favour. 4. Section 60 of the Civil and Administrative Tribunal Act 2013 (the 'Act') states that: '(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.' 1. Rule 38 of the Civil and Administrative Tribunal Rules 2014 states: '(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.' 1. By reason of Rule 38 above, I have the discretion to award costs in these proceedings by reason of the fact that pursuant to section 3 of Schedule 4 of the Act, proceedings under the Retail Leases Act 1994 are allocated to the Commercial and Consumer Division of the Tribunal, and the amount claimed in these proceedings was $130,000.00, plus interest. 2. The general law position is 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 at [134]. 3. At paragraph 67 of the judgement, Gaudron and Gummow J.J. stated '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 whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party[96]. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.' At paragraph 134(2) of the judgement, Kirby J. stated: '2. Notwithstanding the width of the statutory language by which the discretion was conferred on the trial court, it came to be said in civil non-jury trials that a successful party, in the absence of special circumstances, had a reasonable expectation of obtaining an order for costs in its favour unless "for some reason connected with the case" a different order was specially warranted[199]. Any departure from this expectation would require that there should be material upon which the adverse discretion could be properly exercised[200]. It could not be exercised by reference to idiosyncratic notions or to facts and circumstances irrelevant to the case. Yet, until the discretion had been exercised and a costs order made in favour of a successful party, that party had no right to the order of costs, notwithstanding its success in the litigation[201]' 1. The applicants have made short submissions in response to the respondent's costs application. They state that they were unsuccessful on technical law issues, despite the commercial realities of the situation and the alleged poor treatment given to them by the respondent. 2. The applicants also state that that the Tribunal should be a cost neutral forum. 3. While I am sympathetic to the plight of the applicants, I am required to exercise my discretion on the question of costs 'judicially' and not by 'idiosyncratic notions'. For the reasons set out above, the Tribunal is not a costs neutral forum in these proceedings. I also accept the respondent's reference to Rucom Pty Ltd and Anor v Multiplex & Ors [2010] NSWADT 1 as relating to the commerciality of commercial leasing transactions, and the care and attention that ought to be applied before instituting proceedings in the Tribunal. 4. In accordance with the principles set out in the passages quoted above, there is no reason in my view why the successful party in these proceedings, the respondent, should not receive an award of costs in its favour. 5. The respondent seeks a special costs order in that it submits that costs incurred after the date of a 'Calderbank' offer served on the applicants should be paid by the applicants on an indemnity basis. 6. The respondent states the day before the hearing it made a 'Calderbank' offer which offered in effect, to compromise its claim for costs, if the applicants agreed to pay it $15,000.00 for its costs which were stated to be approximately $40,000.00. It was also part of the offer that the applicants' case be dismissed. 7. A party in receipt of a Calderbank offer is in my view entitled to receive a reasonable period of time to consider the offer and if need be to take advice on it before the offer becomes effective. 8. As the English Court of Appeal said in Young v Young [1998] 2 FLR 1131, 1140, Thorpe LJ, with whom Chadwick and Butler-Sloss LLJ agreed, 'Calderbank offers do not bite until the recipient has a reasonable opportunity to consider the proposed compromise'. 9. In this case the applicants received at best one business day in which to consider the offer. That period of time was in my view unreasonable, particularly having regard to the fact that the applicants were not represented at the hearing. The result of my finding that the applicants were not given a reasonable time to consider the offer is, in my view that the respondent's offer should not be taken into account by me. On this basis an order for indemnity costs will not be made in the respondent's favour, as submitted. 10. Quite apart from the question of an unreasonably short period of time given to the applicants to consider the respondent's offer, there is also the issue of whether a respondent's offer to take a lesser sum in costs, if successful, is a legitimate offer to compromise a claim. In my view it was not a true compromise of the claim being pursued by the applicants. 11. Having had regard to the parties' respective written costs submissions, and in accordance with the principles set out in Oshlack v Richmond River Council, there is no reason in my view why the successful party in these proceedings, the respondent, should not receive an award of costs in its favour. 12. I will order the applicants to pay the respondent's costs of these proceedings such costs, if not agreed, to be assessed on the basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004. D Goldstein Senior Member Civil and Administrative Tribunal of New South Wales 13 January 2015 ********** 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: 13 March 2015