Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Sahade v Owners SP No 62022 [2015] NSWCATAP 225 Hearing dates: On the papers Date of orders: 20 October 2015 Decision date: 20 October 2015 Jurisdiction: Appeal Panel Before: M Harrowell, Principal Member L Robberds QC, Senior Member Decision: (1) Pursuant to s 50(2) of the Civil and Administrative Tribunal Act, 2013, the Appeal Panel dispenses with a hearing. (2) The respondents' application for costs is dismissed. (3) Each party is to pay their own costs. Catchwords: Costs - Special circumstances, matters for consideration, relevance of previous and future proceedings Legislation Cited: Civil and Administrative Tribunal Act 2013 Strata Schemes Management Act Cases Cited: Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 Hammond v Ozzys Cheapest Cars Pty Ltd t/as Ozzy Car Sale [2015] NSWCATAP 65 Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 Texts Cited: Ritchie's Uniform Civil Procedure NSW Category: Costs Parties: Rita Sahade (Appellant) Owners – SP No 62022 (First Respondent) Carina Gilster (Second Respondent) Celia Bischoff (Third Respondent) Eckhart Bischoff (Fourth Respondent) Representation: Counsel: M Sahade (Appellant) Solicitors: Trinity Legal (Appellant) First respondent: no appearance Le Page Lawyers (Second, Third and Fourth Respondents) File Number(s): AP 15/08174 Publication restriction: Unrestricted Decision under appeal Court or tribunal: Civil and Administrative Tribunal of New South Wales Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 13 January 2015 Before: S Thode, Senior Member File Number(s): SCS 11/52841 Reasons for decision 1. On 21 July 2015 the Appeal Panel dismissed an appeal by the appellant in relation to an application under s 183 of the Strata Schemes Management Act (SSMA) seeking an order reallocating unit entitlements in respect of strata plan 62022. In doing so, the Appeal Panel made directions in respect of any application for costs. 2. These reasons relate to an application by the second, third and fourth respondents to the appeal who seek their costs of the appeal be paid by the appellant. 3. The Appeal Panel has received the following documents: 1. Submission on costs – second, third and fourth respondents dated 4 August 2015; 2. Appellant's submissions in response to costs application dated 17 August 2015; and 3. Submissions on costs in reply – second, third and fourth respondents dated 25 August 2015. 1. As noted in the Appeal Panel's reasons dated 21 July 2015, the first respondent made a submitting appearance in relation to this appeal. It does not seek costs nor is any application for costs made against it. 2. The Appeal Panel also notes that none of the parties to the application for costs made any submissions objecting to the Appeal Panel dealing with the question of costs "on the papers" without the need for a formal hearing. 3. Accordingly, the Appeal Panel will make an order dispensing with a hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NCAT Act) as the Appeal Panel is satisfied the issue of costs can be adequately determined in the absence of the parties by considering their written submissions and documents provided. Submissions 1. The second, third and fourth respondents (who will be referred to in these reasons as the respondents) made the following submissions. 2. The Appeal Panel has power to award costs pursuant to s 60 if it is satisfied that there are special circumstances. The respondents rely on the decision of Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 at [60] and say special circumstances are established if they are out of the ordinary. They do not need to be extraordinary or exceptional. 3. The respondents referred to the matters identified in s 60(3) of the NCAT Act and identify six grounds in that list upon which they rely to establish special circumstances. 4. Firstly, the respondents say the appellant conducted the proceedings in a way that unnecessarily disadvantages the respondents. The conduct relied upon was that the appellant commenced the appeal based on eight grounds seeking four orders. However at the hearing of the appeal the appellant abandoned every ground except one and only sought two of the four orders. The disadvantage was said to arise because the respondents were required to respond to these issues which were not pursued and thereby incurred costs. 5. The second ground is that the proceedings were unreasonably prolonged. The conduct relied upon was the same conduct as specified for the first ground. 6. The third ground related to the relative strength of the claims made by each party. In this regard the respondents said that the sole ground finally advanced was misconceived and that having regard to the earlier decision of the Court of Appeal the appellant's claim was "weak at best and had 'no tenable basis' in law". 7. The fourth ground was that the proceedings were complex. In this regard the respondents submitted that "the result of decision (was) important in relation to the interpretation of s 183 of the SSMA. 8. The fifth ground was that the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance. The submission made in this regard was the same as that made in relation to ground three set out above. 9. The sixth ground was that the Appeal Panel should have regard to other matters as permitted by s 60(3)(g) of the NCAT Act. In this regard the respondents said: 1. They were successful in the appeal, a matter said to be relevant having regard to the reasoning of the Appeal Panel in Hammond v Ozzys Cheapest Cars Pty Ltd t/as Ozzy Car Sale [2015] NSWCATAP 65 at [105]; 2. One day after the Appeal Panel dismissed the appellant's appeal further proceedings (new proceedings) were commenced under s 183 of the SSMA, which proceedings are "not only misconceived, but… an abuse of process"; 3. The conduct of the proceedings by the appellant and the subsequent commencement of the new proceedings is contradictory to the guiding principles of the NCAT Act; 4. The appellant has unsuccessfully prosecuted applications to reallocate unit entitlements in a "remarkable and excessive number of forums". In this regard the respondents set out the various proceedings before the Consumer, Trader and Tenancy Tribunal (CTTT), District Court of New South Wales, Court of Appeal of the Supreme Court of New South Wales and the Tribunal; and 5. The present appeal and the litigation conducted by the appellant when considered "in toto" could not be considered "ordinary, reasonable, warranted or justified". 1. In reply, the appellant submits that the appeal proceeded only on questions of law and the hearing time was less than one day. 2. In response to the respondents' submission that they were unnecessarily disadvantaged because certain grounds were not pressed at the appeal, the appellant submits "it would be bizarre to find that a respondent was unreasonably disadvantaged by the appellant merely confining and narrowing the appeal to particular issues". Further, having narrowed or confined the issues at the hearing of the appeal, the appellant says that any submission that the proceedings were unreasonably prolonged is ill conceived. 3. In relation to the work preparatory to the appeal, particularly the filing of the appellant's written submissions, and the history of the preparation of the case, the appellant says that: 1. The respondents did not file their reply to appeal on time and this failure restricted the appellant's ability to file and serve the written submissions; 2. Despite the respondents' noncompliance the appellant was directed to file written submission; 3. The appellant did so and the appellant filed written submissions as directed and made clear that certain grounds of appeal were not pressed; and 4. By reason of the foregoing the suggestion that the respondents were disadvantaged with respect to filing of the reply "is disingenuous". 1. In relation to the issue finally pursued on appeal, namely, the contention that the Tribunal had unreasonably exercised its discretion, the appellant submits that there was no finding of the Appeal Panel that such a challenge was not available on a question of law or that the appeal did not articulate a tenable basis in law. 2. The appellant also said that the issue in dispute was "nothing particularly nor unusually complex" and that "the judgment was relatively short". 3. In relation to the subsequent proceedings, the appellant made the following submission at [10]: Lastly, the reference to new proceedings in the Tribunal below on a completely different question (the change of use of land) is irrelevant and has been improperly referred to by the respondents. The Appeal Panel should not comment on that matter that is not before it. 1. The respondents' reply submissions can be summarised as follows: 1. The respondents were unnecessarily disadvantaged because they had to address each ground of appeal up until they were abandoned; 2. The majority of the grounds were abandoned on the day of the hearing, conduct inconsistent with the guiding principle and the appellant's duties pursuant to s 36(3) of the NCAT Act; 3. If the appellant had pursued only one ground in the appeal as occurred at the final hearing, the proceedings would have been determined considerably earlier; 4. Having regards to the reasoning of the Court of Appeal, the basis for the challenge to the exercise of discretion of the Tribunal was unreasonable; and 5. There is nothing improper about the reference to the subsequent proceedings and the Appeal Panel is able to consider this matter under s 60(3)(g) of the NCAT Act. Consideration 1. There is no dispute that the power to award costs in respect of the present appeal is regulated by s 60 of the NCAT Act. However, Section 60(1) provides that the usual rule is each party is to pay their own costs. 2. An order for costs can be made if the Appeal Panel is satisfied special circumstances exist. This expression means circumstances which are out of the ordinary but not necessarily extraordinary or exceptional: see Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120. 3. Section 60(3) of the NCAT Act identifies matters to be considered when determining whether special circumstances exist. The respondents have made submissions about six of these factors. They referred to matters occurring before, during and after the appeal proceedings. 4. The facts relied upon before the appeal proceedings were what happened in the proceedings in the CTTT and to the various appeals to the District Court of New South Wales and Court of Appeal of the Supreme Court of New South Wales and the proceedings before Senior Member Thode and her decision following remittal from the Supreme Court of New South Wales, that decision being the subject matter of the present appeal. 5. Secondly, the respondents rely upon what happened during the course of the appeal. In this regard the conduct relied upon is that the appellant advanced various grounds of appeal and sought orders which were subsequently not pressed at the final hearing. The respondents also say that the ground ultimately advanced was weak or untenable. 6. The third matter put forward was that the appellant has, apparently, commenced further proceedings in the Tribunal subsequent to the Appeal Panel dismissing the appeal which the respondents say are misconceived or an abuse of process. 7. There is no doubt that from when these proceedings were first commenced in the CTTT they have had a long history involving the CTTT, the District Court of New South Wales, the Court of Appeal and more recently, NCAT. As pointed out by the respondents in their submissions in chief, in respect of each of the previous proceedings, whether at first instance or on appeal, the various tribunals and courts have dealt with any application for costs, if made. 8. However the task of the Appeal Panel is to determine whether special circumstances exist in relation to the appeal proceedings which warrant the making of an order for costs, and if so, on what terms. It is the general conduct of the appeal proceedings and not the earlier proceedings that is relevant. 9. This is made clear by considering the matters identified in s 60(3)(a) – (e). Each of these matters requires an evaluation of conduct in connection with "the proceedings" namely the appeal proceedings. 10. Similarly, s 60(3)(f) refers to the duty imposed by s.36(3) of the NCAT Act. This is a reference to the duty on the parties and their representatives to "co-operate with the Tribunal to give effect to the guiding principle". That principle requires the Tribunal "to facilitate the just, quick and cheap resolution of the real issues in the proceedings". Again, this ground relates to considerations involving the appeal proceedings. 11. Section 60(3)(g) does allow the consideration of "any other matter the Tribunal considers relevant". 12. Earlier conduct might cast light upon or be relevant to evaluating the conduct in the present case, for example if the respondent sought to litigate a matter that was res judicata. However, the mere fact of earlier proceedings is not, of itself, sufficient to establish special circumstances nor is it generally informative of what, if any, costs order should be made. 13. In this regard it should be remembered that an award for costs is compensatory and operates to provide an indemnity in whole or in part to a successful party: see the cases referred to at [42.2.10] or Ritchie's Uniform Civil Procedure NSW. It is not imposed as a punishment. 14. In relation to the present application, in our opinion the respondents have not demonstrated circumstances sufficient to justify the making of an award for costs in respect of the appeal proceedings. 15. While it is clear that the proceedings before the CTTT, the courts and the Tribunal have been hard fought, this fact is not of itself sufficient to demonstrate there are special circumstances warranting an award for costs in respect of the appeal proceedings. Any issues in relation to costs of the earlier proceedings are matters to be dealt with in those proceedings and have in fact been dealt with by the relevant tribunal or court. 16. The only feature in respect of the earlier proceedings identified by the respondents that we see may be relevant is that the parties have, at all stages, been represented by legal practitioners whose involvement may be considered appropriate, if not necessary, particularly having regard to the fact that these proceedings have been the subject of appeals to courts. On the other hand, the mere fact that leave is granted to a party to be legally represented in the appeal proceedings is not of itself sufficient to establish special circumstances warranting an award for costs. 17. In relation to the appeal proceedings and the way they were conducted, we are not satisfied that the manner in which the appeal proceedings have been conducted demonstrates special circumstances exist. In this regard: 1. the respondents say that "the proceedings were complex and the resultant decision important in relation to the interpretation of s 183 of the SSMA": respondents' submissions dated 4 August 2015 at [16]. This would suggest the proceedings were not frivolous, vexatious, misconceived or lacking in substance; 2. the time taken to resolve the issues in the appeal and the manner of their presentation by the respective legal representatives does not, in the present circumstances, appear "out of the ordinary". 3. there appears no conduct that unnecessarily disadvantaged the respondents. In this regard lawyers have exchanged documents, albeit with some delay, and refined the issues for final hearing. 4. it is not sufficient to establish special circumstances to merely show that parties were represented by lawyers who had opposing views. 5. the conduct of the appellant in the present case should not be seen as contravening s 36(3) of the NCAT Act. This is because the substance of the appeal was always about whether the discretion of the Tribunal miscarried. 1. Lastly, the material presented on appeal was not voluminous or otherwise presented in a form which itself was out of the ordinary. 2. In relation to the subsequent proceedings, apparently seeking a further order under s 183 of the SSMA, in our view these proceedings are irrelevant to the consideration of whether or not there are special circumstances warranting an award of costs in the present appeal. 3. As we indicated above, any award for costs is compensatory and is to indemnify a person for costs incurred in connection with the particular proceedings to which the award for costs relate. In so far as the further proceedings might constitute an abuse of process or might be misconceived, a matter about which the Appeal Panel expresses no opinion, the fact of commencing the proceedings has no bearing upon whether or not special circumstances exist warranting an award for costs in the present appeal proceedings. 4. The final issue to deal with is the submission that the respondents were successful in the appeal. 5. As stated in Ozzy Car Sales, success in proceedings is a relevant consideration. However, again the fact of success is not, of itself, sufficient to establish special circumstances. Further, the matter argued could not be described as untenable at law or otherwise lacking in substance. 6. Having regard to the various matters to which the respondents point it seems to us that none of those matters when considered separately nor when considered collectively are sufficient to establish special circumstances. 7. Further, even if some of the matters identified might be considered as out of the ordinary, we would not exercise our discretion to award costs. This is because there are no features of this case which should displace the usual rule that each party to proceedings in the Tribunal is to pay their own costs. 8. In these circumstances the Appeal Panel makes the following orders: 1. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act, 2013, the Appeal Panel dispenses with a hearing. 2. The respondents' application for costs is dismissed. 3. Each party is to pay their own costs. ********** 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 October 2015