Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Yarraford Pastoral Company Pty Ltd v Wise [2016] NSWCATAP 97 Hearing dates: 12 March 2016 (on papers after that date) Date of orders: 02 May 2016 Decision date: 02 May 2016 Jurisdiction: Appeal Panel Before: Hennessy LCM, Deputy President T Simon, Senior Member Decision: The appellant's application for costs is refused. The respondent's application for costs of the appellant's costs application is refused. Catchwords: COSTS – general rule is each party is to pay their own costs – whether special circumstances warranting an award of costs Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW)(NCAT Act), s 60 Civil and Administrative Tribunal Rules 2014 (NSW) Cases Cited: Gaynor v Burns [2015] NSWCATAP 150 Yarraford Pastoral Company Pty Ltd v Wise [2015] NSWCATAP 201 Category: Costs Parties: Yarraford Pastoral Company Pty Ltd (Appellant) Ian Wise (Respondent) Representation: Counsel: T Flaherty (Appellant) D Smallbone (Respondent) Solicitors: Lay Associates & Legal (Appellant) WA Baxter & Co Pty Ltd (Respondent) File Number(s): AP 15/29362 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: [2015] NSWCATCD 41 Date of Decision: 27 March 2015 Before: J Smith, Senior Member File Number(s): GEN 14/20031 REASON FOR DECISION Overview 1. Yarraford Pastoral Company Pty Ltd has applied for costs of the appeal proceedings. The main issue is whether the normal costs rule, that each party pays their own costs, should apply or whether there are special circumstances warranting an award of costs in favour of Yarraford: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 60. Our conclusion is that the respondent, Mr Wise, did nothing to justify a costs order, nor are there are other circumstances justifying a costs order. Mr Wise has applied for his costs of responding to the costs application. We have refused that application. Background to the Appeal Panel proceedings 1. Yarraford brought proceedings against Mr Wise in the Consumer and Commercial Division of the Tribunal. Yarraford later withdrew its application and the Tribunal dismissed it. Following the dismissal, the Tribunal directed the parties to file and serve short written submissions on the issue of costs. The Tribunal decided, 'on the papers' that Yarraford should pay Mr Wise's costs of $5,996.10 and noted that no submission had been received from Yarraford. In fact, Yarraford had sent an email containing its submissions prior to the due date, but the Tribunal had not taken those submissions into account. Yarraford appealed on the ground that there had been a breach of procedural fairness. 2. The Appeal Panel set aside the Tribunal's decision and remitted the matter to the Tribunal to reconsider Mr Wise's application for costs: Yarraford Pastoral Company Pty Ltd v Wise [2015] NSWCATAP 201. Although cl 13(3) of the Civil and Administrative Tribunal Rules 2014 (NSW) requires submissions to be lodged by post, the Appeal Panel considered that there had been a "practical injustice" in this case. An automatically generated reply had advised Yarraford that the email "has been forwarded to the appropriate area for attention" and "will be answered as soon as possible". The Appeal Panel found that it was not unreasonable for Yarraford to assume that its submissions would be taken into account and that the Tribunal had not given it a reasonable opportunity to be heard. Costs rule 1. The applicable costs rule is set out in s 60 of the NCAT Act: (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 the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) 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. In Gaynor v Burns [2015] NSWCATAP 150 at [18] and [19], the Appeal Panel set out the legal principles applicable to s 60: 18. The drafting of s 60(1) evinces the intent of the legislature that generally each party to proceedings in the Tribunal shall be responsible for their own costs. Departure from s 60 (1) may occur but only if the Tribunal finds, there are "special circumstances" warranting it to do so. In determining whether there are special circumstances the Tribunal may, in a structured exercise of discretion, have regard to the criteria in s 60 (3) (a) – (g). 19. In Cripps v G & M Dawson [2006] NSWCA 81 Santow JA considered the words "special circumstances" as they appeared in s 88 (1) of the Administrative Decisions Tribunal Act 1997 (NSW) (repealed). That provision enabled the Tribunal to award costs in relating to proceedings before it only if it was satisfied there were "special circumstances warranting an award of costs". Santow JA set out the Tribunal's statement of relevant principle at [18] - [19] of its reasons and concluded that the Tribunal had erred in its application of those principles in failing to find "special circumstances" explaining at [60]: 60 It is not necessary to determine whether in the circumstances the appellant committed equitable fraud. In my view it suffices that the conduct of Cripps and Jones, in relying upon their status as the registered proprietors of the freehold and the doctrine of indefeasibility of title to wrongly deny registration and consequently assignment of the lease, so acted as by their conduct to give rise to special circumstances; that is, circumstances that were clearly out of the ordinary and grossly unreasonable so far as the respondent tenant was concerned. On the one hand, the Tribunal correctly concluded that the respondent, through no fault of its own, has been placed in the situation where it has been forced to pursue this litigation. Yet it still failed to find special circumstances. With respect, I consider that the Tribunal was in error in failing to conclude that special circumstances here applied. For this purpose, it suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional. While a finding of "serious unfairness" is not prerequisite to determining that there are special circumstances, it is nonetheless a highly relevant consideration. Grounds for Yarraford's costs application 1. The general rule is that each party should pay their own costs. Yarraford relied on the following grounds as constituting 'special circumstances' warranting an award of costs in the proceedings before the Appeal Panel: 1. Mr Wise conducted the proceedings in a way that unnecessarily disadvantaged Yarraford by vigorously defending the appeal: s 60(3)(a); 2. Mr Wise has been responsible for prolonging unreasonably the time taken to complete the proceedings by not consenting to the matter being re-determined by the Tribunal: s 60(3)(b); 3. Mr Wise has defended the appeal in circumstances where this is a 'textbook example' of where a party to proceedings was not afforded procedural fairness: s 60(3)(c); 4. Mr Wise has failed to comply with the duty to co-operate with the Tribunal and give effect to the guiding principle by vigorously defending the appeal rather than agreeing to it being remitted: s 60(3)(f); 5. the fact that in Mr Wise's written submission to the Appeal Panel dated 23 June 2015, he applied for costs on an indemnity basis: s 60(3)(g); 6. the fact that, unless costs are awarded in favour of Yarraford, Yarraford will be out of pocket: s 60(3)(g). Consideration 1. As to (5) above, the fact that Mr Wise made that submission does not imply, in any sense, that there are special circumstances warranting an order for costs in favour of Yarraford. Mr Wise has not applied for costs and we have not taken into account any matters which may have justified an award of costs in his favour. 2. Yarraford's costs application relates to the proceedings before the Appeal Panel, not to the proceedings before the Consumer and Commercial Division either at first instance or on remittal. Consequently we have not taken into account any evidence or submissions from either party that relate to those proceedings unless they are relevant to the costs in the appeal proceedings. 3. We are not satisfied that the fact that Mr Wise vigorously defended the appeal instead of consenting to the Tribunal's decision being set aside, warrants an award of costs. It makes no difference to that conclusion that Yarraford wrote to Mr Wise on 18 May 2015 expressing the view that the appeal was about the Tribunal's conduct and there would be little, if anything that Mr Wise would be able to say about it. 4. Opposing or defending the appeal is not conduct that unnecessarily disadvantaged Yarraford. We agree with Mr Wise that a construction of s 60(3)(a) that allowed contesting an appeal to be construed as conduct which unnecessarily disadvantaged another party would virtually eliminate the primary rule that each party pay their own costs. Rather, s 60((3)(a) relates to the manner in which proceedings are conducted. Yarraford has not pointed to anything in the way Mr Wise conducted the appeal that disadvantaged it in any way. 5. Similarly, we are not satisfied that Mr Wise has been responsible for prolonging unreasonably the time taken to complete the proceedings. Again, we agree with Mr Wise's submission that the delay referred to in s 60(3)(b) is not the ordinary and proper time taken to complete the appeal proceedings, but rather unreasonable delay. There was no such delay in this case. 6. The submission that Mr Wise should not have defended the appeal relates to the merits of his defence: s 60(3)(c). The Appeal Panel noted at [22] of its first decision (Yarraford Pastoral Company Pty Ltd v Wise [2015] NSWCATAP 201), that the NCAT Rules do not allow lodgement of submissions by email. While the Tribunal may dispense with those Rules, it did not do so in this case. In circumstances where the Tribunal did not take into account submissions provided by email, it was open to Mr Wise to submit that there had been no breach of procedural fairness. It was the particular circumstances of this case including the fact that the Tribunal acknowledged the email, that persuaded the Appeal Panel that there had been a "practical injustice" and that the matter should be remitted. 7. Mr Wise makes a further point, which we accept, that the powers of the Panel on appeal are broader than merely determining the procedural point and ordering a remittal. The Appeal Panel had power to deal with the internal appeal by way of a new hearing at which Yarraford's submission could have been taken into account: NCAT Act, s 80(2)(b). It was not unreasonable or untenable for Mr Wise to seek to persuade the Panel to take that course in the interests of resolving the whole question expeditiously. 8. Yarraford also relied on a submission under s 60(3)(f) that Mr Wise had failed to comply with the duty to co-operate with the Tribunal to give effect to the "guiding principle". The "guiding principle" is to "… to facilitate the just , quick and cheap resolution of the real issues in the proceedings". Mr Wise cannot be said to have failed to co-operate by putting forward a defence to the appeal even if that defence was ultimately unsuccessful. 9. There is no conduct or circumstance that justifies an order that Mr Wise pay Yarraford's costs of the appeal. Grounds for Mr Wise's application for the costs of responding to Yarraford's cost's application 1. Mr Wise applied for the costs of Yarraford's costs application, as agreed or assessed. Mr Wise submitted that Yarraford's costs application amounts to unduly burdensome and unwarranted litigation which is disproportionate to the amount in dispute. While the costs application was not successful, we are not satisfied that there are any special circumstances warranting an order that Yarraford pay Mr Wise's costs of responding to the costs application. Orders 1. The appellant's application for costs is refused. 2. The respondent's application for costs of the appellant's costs application is refused. ********** 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: 02 May 2016