Civil and Administrative Tribunal New South Wales Medium Neutral Citation: CPD Holdings Pty Ltd v Baguley [2016] NSWCATAP 160 Hearing dates: On papers after 24 June 2016 Date of orders: 25 July 2016 Decision date: 25 July 2016 Jurisdiction: Appeal Panel Before: Hennessy LCM, Deputy President Dr J Lucy, Senior Member Decision: 1. A hearing is not required. 2. The Appellant's application for costs is dismissed. Catchwords: COSTS – special circumstances – whether there are special circumstances justifying an order for costs on appeal from costs orders – whether amount of costs relevant to existence of special circumstances Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), ss 50, 60 and 81(1)(e) Civil and Administrative Tribunal Rules 2014 (NSW), r 38A Cases Cited: Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 Sahade v Owners SP No 62022 [2015] NSWCATAP 225 Category: Costs Parties: CPD Holdings Pty Ltd (Appellant) John Baguley (1st Respondent) Daniella Baguley (2nd Respondent) Representation: Solicitors: Gerald Aronstan Solicitor & Attorney (Appellant) Birch Partners Lawyers (Respondent) File Number(s): AP15/43112 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 16 June 2015 Before: J Smith, Senior Member File Number(s): HB 13/20778 HB 13/27768 REASON FOR DECISION The question 1. The question in these proceedings is whether there are special circumstances warranting an award of costs in favour of the Appellant, CPD Holdings Pty Ltd. How the question arises 1. CPD Holdings Pty Ltd (the builder) and home owners John and Daniella Baguley each brought proceedings against the other which were heard in the Consumer and Commercial Division of the Tribunal. The Tribunal made orders, the net effect of which was that the builder pay the homeowners $9,780.00. The Tribunal also ordered that each party pay their own costs in the builder's claim and that the builder pay the homeowners' costs in the homeowners' claim. The builder appealed to the Appeal Panel against both costs decisions. 2. On 12 May 2016 the Appeal Panel set aside both costs decisions and directed that the Tribunal reconsider those decisions: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 81(1)(e). The Appeal Panel also directed that: 1. Within 28 days of the date of these reasons the parties are to file and serve any application for costs on appeal. 2. Within a further 14 days of receipt of any such application, the parties are to file and serve any submissions in reply. 1. On 9 June 2016 the builder applied for costs of the appeal. On 24 June 2016 the homeowners filed a submission in reply. We have assumed that despite a brief submission that the builder pay the homeowners costs on appeal in written submissions dated 19 October 2015, the homeowners no longer press that application. 2. After consulting with the parties we have dispensed with a hearing because we are satisfied that the issues for determination can be adequately determined in the absence of the parties: NCAT Act, s 50. Consideration of the question 1. These appeal proceedings were commenced in July 2015. Consequently, r 38A of the Civil and Administrative Tribunal Rules 2014 (NCAT Rules), which relates to costs of internal appeals, does not apply. The general rule is that each party to proceedings in the Tribunal is to pay their own costs: NCAT Act, s 60(1). The Tribunal may award costs "only if it is satisfied that there are special circumstances warranting an award of costs": NCAT Act, s 60(2). The circumstances do not have to be "extraordinary or exceptional". It suffices if they are "out of the ordinary": Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 Santow JA at [60] (Mason P and Brownie AJA agreeing). 2. Section 60(3) of the NCAT Act lists the matters to which the Tribunal may have regard when determining whether there are special circumstances warranting an award of costs. As well as the matters listed in paragraphs (a) to (f), the Tribunal may have regard to any other matter it considers relevant: NCAT Act, s 60(3)(g). The builder relied on the "nature and complexity of the proceedings" and the following other matters: 1. the builder has been wholly successful; 2. the total amount of costs expended by both parties which was estimated to be in excess of $150,000; 3. there is a discretion to award costs at first instance in building claims involving more than $30,000. Nature and complexity of the proceedings 1. The builder submitted that the nature and complexity of the proceedings at first instance constitutes special circumstances. 2. It is not the nature and complexity of the proceedings at first instance that is relevant. It is the nature and complexity of the appeal proceedings: Sahade v Owners SP No 62022 [2015] NSWCATAP 225 at [30]–[34]. Those proceedings required the parties to identify the legal principles that apply in relation to costs when the substantive orders are made by consent. The Tribunal at first instance identified those principles but did not apply all of them to the facts of the case. The proceedings were not particularly complex even though we acknowledge that representation by lawyers was justified. As the Appeal Panel said in Sahade v Owners SP No 62022 [2015] NSWCATAP 225 at [38], "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." Builder wholly successful 1. The builder was wholly successful in the sense that the Appeal Panel set aside both costs orders and directed the Tribunal to reconsider the question of costs. But success on appeal does not necessarily constitute a special circumstance. The Appeal Panel may take into account "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": NCAT Act, s 60(3)(c). Just because a party is successful on appeal does not mean that their claim was particularly strong or that the losing party's claim was particularly weak: Sahade v Owners SP No 62022 [2015] NSWCATAP 225 at [44]. In this case, the decisive point on appeal was one that the Appeal Panel raised. In all the circumstances we are not satisfied that the fact that the builder was wholly successful warrants an award of costs. Amount of costs in dispute 1. One of the reasons the Appeal Panel exercised the discretion to award costs in Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 was that the appeal related to a commercial transaction involving a significant amount of money (see at [16]). The reason that matter was a relevant consideration was that, in the Consumer and Commercial Division, the Tribunal has a discretion to award costs if the amount in issue is more than $30,000: NCAT Rules, r 38. While the amount in issue is a relevant matter when determining whether to award costs at first instance and on appeal, it does not follow that the amount of costs in dispute is relevant to a determination of whether a costs order should be made under s 60 of the NCAT Act. Costs discretion at first instance 1. In Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 the Appeal Panel noted that the Tribunal may award costs in disputes involving more than $30,000, "in such circumstances as it thinks fit." The Appeal Panel concluded at [15] that that was a relevant matter when determining whether there were special circumstances warranting an award of costs on appeal. Because the amount in dispute was more than $30,000, the Tribunal may award costs at first instance "in such circumstances as it thinks fit": Consumer Trader and Tenancy Act 2001 (NSW), repealed, s 53; Consumer Trader and Tenancy Regulation 2009 (NSW) repealed, cl 20. While that rule does not apply on appeal, it is a factor which the Appeal Panel may take into account in deciding whether special circumstances exist on appeal: NCAT Act, s 60(3)(g). One reason for its relevance is that parties have the expectation of an unfettered discretion being applied in relation to an application for costs at first instance and will make decisions about the merits of their case and the desirability of legal representation partly on that basis. 1. While the existence of a costs discretion at first instance is a relevant matter, we are not satisfied that that matter alone constitutes special circumstances warranting an award of costs. 2. In summary, we have decided that none of the circumstances put forward by the builder, either alone or in combination, warrant an order for costs. Order 1. A hearing is not required. 2. The Appellant's application for costs is dismissed ********** 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: 25 July 2016