Civil and Administrative Tribunal New South Wales Medium Neutral Citation: White v Sunrise Pools Australia Pty Ltd [2017] NSWCATAP 236 Hearing dates: On the papers Date of orders: 22 December 2017 Decision date: 22 December 2017 Jurisdiction: Appeal Panel Before: L Pearson, Principal Member J Lucy, Senior Member Decision: (1) The appellant is to pay the respondent's costs of this appeal as agreed or 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). (2) The respondent's application for leave to appeal from the costs decision below is dismissed. Catchwords: APPEAL – Costs - Home building – Application for costs of appeal by successful respondent - Where amount in dispute more than $30,000 – Principle that costs follow the event – Whether Calderbank offer made – Whether the question of whether there was a need for the parties to be legally represented is relevant to the exercise of the costs discretion. LEAVE TO APPEAL – Where application for leave to appeal from costs decision at first instance already determined Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Home Building Act 1989 (NSW) Civil and Administrative Tribunal Rules 2014 (NSW) Cases Cited: Bonita v Shen [2016] NSWCATAP 159 Calderbank v Calderbank [1976] Fam Law 93; [1975] 3 All ER 333; [1975] 3 WLR 586 Jones v Bradley (No 2) [2003] NSWCA 258 Latoudis v Casey (1990) 170 CLR 534 McPherson v Mace [2017] NSWCATAP 227 Thompson v Chapman [2016] NSWCATAP 6 White v Sunrise Pools Australia Pty Ltd [2017] NSWCATAP 216 Category: Costs Parties: Rachel White (Appellant) Sunrise Pools Australia Pty Ltd (Respondent) Representation: Michael White (agent) for the Appellant Adams Partners Lawyers for the Respondent File Number(s): AP 17/25930 Publication restriction: None Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 9 May 2017 Before: J Smith, Senior Member File Number(s): HB 16/45013 Reasons for Decision 1. The respondent ("Sunrise Pools") applied for the costs of a home owner's appeal from a decision in a building dispute. The home owner's appeal was unsuccessful. 2. The decision appealed from was made in the Tribunal's Consumer and Commercial Division and the amount in dispute was in excess of $30,000. Under the Tribunal's rules, it is not necessary for a party to demonstrate special circumstances to be awarded costs on such an appeal. 3. We have decided that the usual rule, that costs follow the event, should apply, and that Sunrise Pools should be awarded its costs of the appeal. 4. We have also dismissed an application by the home owner for leave to appeal against the decision as to the costs of the proceedings at first instance. We determined that application in reasons given at the time we determined the substantive appeal. Decision on the papers 1. Sunrise Pools submits that the costs application should be determined on the papers, there being no reason to have a formal hearing. The home owner stated, in her submissions, that she would rely upon the Tribunal's decision as to whether a hearing was required. 2. A further hearing would add to the costs already incurred by Sunrise Pools, it would lengthen the proceedings and it would not, in our view, facilitate the just, quick and cheap resolution of the real issues in the proceedings (Civil and Administrative Tribunal Act 2013 (NSW), s 36(1)). 3. We are satisfied that the issues for determination can be adequately determined in the absence of the parties by considering the written submissions and other documents lodged with the Tribunal (Civil and Administrative Tribunal Act, s 50(2)). Accordingly, we have decided to dispense with a hearing on the issue of costs. Costs application made by Sunrise Pools 1. Sunrise Pools applied for its costs of the appeal. 2. Rule 38 and 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) provide: "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. 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. The amount in dispute in the proceedings was more than $30,000 and the appeal was lodged after 1 January 2016. Accordingly, the Appeal Panel may award the costs of the appeal in the absence of special circumstances. 2. The home owner was wholly unsuccessful in her appeal: White v Sunrise Pools Australia Pty Ltd [2017] NSWCATAP 216. The starting point in exercising the costs discretion is that a successful party should be entitled to an order for costs in that party's favour: Thompson v Chapman [2016] NSWCATAP 6 at [69]; Bonita v Shen [2016] NSWCATAP 159 at [59]. 3. McHugh J explained the rationale for the principle that costs generally follow the event in Latoudis v Casey (1990) 170 CLR 534 at 567: "An order for costs indemnifies the successful party in litigious proceedings in respect of liability for professional fees and out-of-pocket expenses reasonably incurred in connection with the litigation: Kelly v. Noumenon Pty Ltd (1988) 47 SASR 182, at p 184. The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory. Thus, in civil proceedings an order may, and usually will, be made even though the unsuccessful party has nearly succeeded or has acted reasonably in commencing the proceedings." 1. In response to the costs application of Sunrise Pools, the home owner submitted that: 1. the dispute was a relatively straightforward domestic building dispute and there was no need for either party to be represented, so that the appropriate order was for each party to bear that party's own costs; and 2. the home owner's representative (her husband) had made a "Calderbank" offer at the hearing which should be taken into account by the Appeal Panel when exercising its costs discretion. Claim that dispute was relatively straightforward 1. The Appeal Panel does not agree with the home owner's view that this was a relatively straightforward domestic building dispute. The home owner made eight separate claims in the proceedings below and both parties adduced expert evidence. The appeal was also reasonably involved. The home owner identified eight grounds of appeal. Each of these had to be addressed separately, both by Sunrise Pools and by the Appeal Panel. 2. Even if this were a relatively straightforward dispute, contrary to the Appeal Panel's view, the Tribunal at first instance and the Appeal Panel granted leave to the parties to be legally represented. That decision having been made, it is not appropriate for the Appeal Panel to revisit the question of whether leave should have been granted when determining whether to award costs. That would not be consistent with the principled exercise of the costs discretion. 3. For these reasons, we reject the home owner's submission that there was no need for Sunrise Pools to be represented and that, for this reason, each party should bear that party's own costs. Making of settlement offer 1. The home owner's husband claims, in submissions, to have made an offer, at the directions hearing preceding the appeal hearing, to withdraw the appeal if Sunrise Pools provided him with an engineering and design certificate. He says that Sunrise refused to provide it. 2. There is no evidence before the Appeal Panel of the making of this offer, such as a transcript or sound recording of the directions hearing. The home owner does not claim that the offer was put in writing. 3. The circumstance that there is no evidence of the making of the offer is enough to dispose of the claim that the Appeal Panel should have regard to it when exercising its costs discretion. There are also other factors which tend against taking it into account. 4. The home owner submits that this was a "Calderbank" offer, relying upon Calderbank v Calderbank [1976] Fam Law 93; [1975] 3 All ER 333; [1975] 3 WLR 586. 5. A Calderbank offer is relevant when the party making the offer seeks that party's costs. The outcome of the litigation must be as favourable to the party who made the offer as what was offered, or more favourable to that party. In such circumstances, the party who made the offer may be awarded indemnity costs, although that is in the discretion of the relevant court or tribunal: see McPherson v Mace [2017] NSWCATAP 227 at [45]; Jones v Bradley (No 2) [2003] NSWCA 258. 6. It is difficult to put a value on the home owner's offer to discontinue the appeal in exchange for the provision of an engineering and design certificate. However, as the home owner was wholly unsuccessful in her appeal, it cannot be said that the decision of Sunrise Pools not to accept the offer was unreasonable (Jones v Bradley (No 2) [2003] NSWCA 258 at [10]). We note also that the offer was made orally and the period for which it was open is unclear. Conclusion 1. We accept the submission of Sunrise Pools that there has been no disentitling conduct on its part, and that there is no other reason why costs should not follow the event in the circumstances of this case. 2. We consider that, as the successful party on appeal, it is appropriate that Sunrise Pools be compensated for the costs of the appeal, in accordance with the principles set out above. Home owner's application for leave to appeal costs decision 1. The home owner submitted that the Appeal Panel should grant her leave to appeal from the costs decision below. 2. As the home owner acknowledged, the application was made at the hearing of the substantive appeal. The Appeal Panel declined to grant leave for the reasons set out at paragraphs 87 to 94 of its reasons (White v Sunrise Pools Australia Pty Ltd [2017] NSWCATAP 216). 3. We consider that we probably do not have power to reconsider the grant of leave to appeal in circumstances where we have already determined this application. However, if we do have such power, we would decline to grant leave to appeal from the costs decision below for the reasons already given. The home owner did not identify any error in the costs decision, saying only that the parties did not need to be legally represented. We have already dealt with this argument in relation to the costs of the appeal. ORDERS 1. The Appeal Panel makes the following orders: 1. The appellant is to pay the respondent's costs of this appeal as agreed or 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). 2. The respondent's application for leave to appeal from the costs decision below is dismissed. 3. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar ********** 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: 22 December 2017