Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Solomons v Valley Motor Auctions Pty Ltd [2017] NSWCATAP 31 Hearing dates: 4 October 2016 Date of orders: 17 February 2017 Decision date: 17 February 2017 Jurisdiction: Appeal Panel Before: Cowdroy ADCJ, QC, Principal Member Decision: (1) The appellant is to pay the costs of the appeal assessed by way of lump sum award in the amount of $3,500. Catchwords: COSTS; appellant abandoning appeal; costs claimed by the respondent; whether Part 38 applied to original claim; appellant unrepresented – respondent entitled to be compensated for costs incurred in abandoned appeal Legislation Cited: Civil and Administration Tribunal Act 2013(NSW) Cases Cited: Oshlack v Richmond River Council (1998) 193 CLR 72 Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365 Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32 Christine Solomons v Valley Motor Auctions Pty Ltd and New Model Wreckers Pty Ltd [2016] NSWCATCCD Cummins v Australian Jockey Club Ltd [2009] NSWSC 254 eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 Foukkare v Angreb Pty Ltd [2006] NSWCA 335 Latoudis v Casey (1990) 170 CLR 534 Norris v Hamberger [2008] NSWSC 785 Pillay v Ku-ring-gai Council [2015] NSWCATAP 83. Ralph Lauren 57 Pty Ltd v Byron Shire Council [2014] NSWCA 107 Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 Scope Data Systems Pty Ltd v Agostini Jarrett Pty Ltd [2007] NSWSC 971 Thompson v Chapman [2016] NSWCATAP 6 Category: Costs Parties: Christine Joyce Solomons (Appellant) Valley Motor Auctions Pty Ltd (1st Respondent) New Model Wreckers Pry Ltd (2nd Respondent) Representation: Solicitors: GM Brebner & Associates (Appellant) McDonald Johnson Lawyers (1st Respondent) File Number(s): AP 16/37989 Decision under appeal Court or tribunal: NSW Civil & Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 26 July 2016 Before: D Robertson, Senior Member File Number(s): MV 15/63451 Reasons for Decision 1. The appellant was unsuccessful in a claim she instituted in the Commercial and Consumer Division of the Tribunal. The claim arose out of alleged defects in a second-hand motor vehicle purchased by the appellant from the respondent, and a claim for damages arising from the defective vehicle: see Christine Solomons v Valley Motor Auctions Pty Ltd and New Model Wreckers Pty Ltd [2016] NSWCATCCD: 24 May 2016 ("the decision"). 2. The appellant appealed the decision. As a result, the respondents engaged solicitors and counsel to prepare a Reply, to advise, and to appear at a directions hearing on 4 October 2017. 3. The appellant, who was not legally represented at the Tribunal hearing, nor when she filed her appeal, ultimately obtained legal advice. As a consequence of such advice, the appellant withdrew her appeal at the directions hearing on 4 October 2016. On that day the Appeal Panel reserved the question of costs. That is the issue now to be determined. Statutory Provisions 1. The general provisions concerning costs in the Tribunal are found in s.60 of the Civil and Administrative Tribunal Act (NSW) ("the NCAT Act"), which relevantly provides: "60 Costs (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." 1. Under s.60, as a general rule, costs can only be ordered if the Tribunal is satisfied that there are "special circumstances" warranting such an award, within the meaning of s.60(2). 2. Rule 38 provides: "38 Costs in Consumer and Commercial Division of the Tribunal (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. Rule 38A provides: "38A Costs in internal appeals (1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of: (a) enabling legislation, or (b) the Division Schedule for the Division of the Tribunal concerned, or (c) the procedural rules. (2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal." 1. Rule 38 A applies to the present appeal because it was lodged after 1 January 2016. Submissions 1. Each party has provided written submissions. Essentially the appellant submits that: 1. She was not legally represented when the appeal was instituted. 2. That upon receiving advice that the appeal would not succeed, she abandoned the appeal at an early opportunity, namely at the directions hearing. 3. That the costs provisions contained in s.60 of the NCAT Act should apply; with the result that each party should pay its costs because no special circumstances exist to depart from the usual rule that each party pay its own costs in Tribunal proceedings. 4. The appellant acknowledges that her appeal was a consumer claim, but submits that, although her claim exceeded $30,000, the Tribunal found that the claim was grossly inflated, and that $13,000 was the correct value of her claim. Accordingly, the provisions of s.38(2)(b) of the NCAT Act should not apply. 5. No lump sum order should be awarded; that the costs claimed are excessive; and that if any order is to be made against the appellant, it should be an order that the costs be assessed or taxed on a party/party basis. Consideration 1. An award of costs against a party is not intended to be punitive, but compensatory in nature in recognition that the successful party has incurred avoidable expense in defending an unmeritorious claim: see Oshlack v Richmond River Council (1998) 193 CLR 72 at 97 when McHugh J (in dissent but with the tacit agreement on this issue with other members of the Court) said: "The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expenses which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation." 1. For other authorities to the same effect, see: Latoudis v Casey (1990) 170 CLR 534 at 543, 562-563; Thompson v Chapman [2016] NSWCATAP 6 at [69]. 2. Notwithstanding the Tribunal's finding that the claim was greatly exaggerated, the fact is that a claim in excess of $30,000 was made, the appellant even asserting that her claim for damages could even be in the vicinity of $40,000. The criterion contained in s.38(2)(b) is whether "the claim" exceeds $30,000 for that provision to apply. Clearly, that requirement is satisfied, and the provisions of s.38(2)(b) have application to the appellant's claim. 3. The appellant maintains that the Tribunal Member's finding should be determinative on this issue. However, s.38(2)(b) is clear in respect of its application, and no scope exists to vary the effect of s38A resulting from a Tribunal finding that the claim fell below the $30,000 threshold. Further, the appellant's Notice of Appeal did not suggest that her claim was to be reduced below $30,000. 4. The appellant's submissions rely upon the fact that she was not legally represented when she filed her Notice of Appeal. That ignorance is irrelevant. So far as the respondent was concerned, the appeal was being pursued with the same vigour as the appellant's claim before the Tribunal, and in the same amount. 5. In the circumstances, the Tribunal finds that the provisions of s.38(2)(b) apply. Discretion 1. The next issue is one of discretion. The appellant has referred the Appeal Panel to decisions in which some concession has been made in favour of an unrepresented litigant: see eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 when the appeal said: "There are authorities which indicate that courts are entitled to regard as a relevant factor in determining the scope of a costs order, the fact that a party is unrepresented. Generally, courts are more reluctant to order indemnity costs against a litigant in person as litigants in person can suffer the limitations arising from a lack of knowledge of the law familiarity of court practices and the risk of a lack of objectivity (see the discussion in Dal Pont: The Law of Costs, 3rd Ed., at 16.50 pp 548-549). A recent decision of the Appeal Panel noted the difference of approach that may be necessary where a litigant in person, rather than a lawyer appears before it and makes submissions which otherwise perhaps would not have been made: Pillay v Ku-ring-gai Council [2015] NSWCATAP 83 at [36]-[41]. We agree with that approach." See also to similar effect Pillay v Ku-ring-gai Council [2015] NSWCATAP 83. 1. Whether it is correct that the appellant was acting in a "state of innocence" as alleged, and whether the appellant was in any way misled by the Tribunal's website, which contains the following: "If you do not understand the orders, in particular what you or the other party have been ordered to do and by when, ask the Tribunal Member to explain them to you." is a matter which does not detract from s.38(2)(b). The authorities make it plain that there must be a good reason to depart from the application of the usual costs rules: see Ralph Lauren 57 Pty Ltd v Byron Shire Council [2014] NSWCA 107 at [21]-[29]; Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32 at [53]-[54] and [69]-[74]. 1. Further, where a plaintiff (or applicant) discontinues without the consent of the defendant, the latter is entitled to an order unless a court orders otherwise: Scope Data Systems Pty Ltd v Agostini Jarrett Pty Ltd [2007] NSWSC 971; Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365; Norris v Hamberger [2008] NSWSC 785; Foukkare v Angreb Pty Ltd [2006] NSWCA 335 at [68]. 2. The discretion to depart from the general rule is usually not exercised where a claim is abandoned: Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 at 624; Cummins v Australian Jockey Club Ltd [2009] NSWSC 254 at [22]. Quantum 1. The claim of $6,165 made for costs is solicitor/client costs. The itemisation suggests that those costs flow directly from the aborted appeal, and that such costs are reasonable and have been reasonably incurred. However, the respondent maintains that if taxed, other costs would be included. However, on taxation this amount claimed would probably be reduced by approximately one-third. 2. To end further costs, the Tribunal considers that an order for an award of costs in favour of the respondent in a lump sum of $3,500.00 is appropriate. Such award will give some recognition to the submissions of the appellant whilst not unduly prejudicing the respondent as to the amount it might be awarded following a costly taxation on a party / party basis. Orders 1. The appellant is to pay the costs of the appeal assessed by way of lump sum award in the amount of $3,500.00. 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: 17 February 2017