Civil and Administrative Tribunal New South Wales Medium Neutral Citation: N & T Buildings Pty Ltd v Ball [2018] NSWCATAP 83 Hearing dates: On the papers Date of orders: 09 April 2018 Decision date: 09 April 2018 Jurisdiction: Appeal Panel Before: Ian Bailey AM SC, Senior Member David Goldstein, Senior Member Decision: (1) The Appellant shall pay the costs of the Respondents on the usual basis. Catchwords: APPEAL – Costs, order for representation by legal practitioner, requirement for order under s45 of the Act. Legislation Cited: Civil and Administrative Tribunal Act 2013 Civil and Administrative Tribunal Rules 2014 Cases Cited: Thompson v Chapman [2016] NSWCATAP 6 Draper v Gibbs [2014] NSWCATAP 54 Category: Costs Parties: N & T Buildings Pty Ltd (Appellant) Clifford and Carmel Ball (Respondents) Representation: Counsel: M Davies (Appellant) G Carolan (Respondents) Solicitors: N Ballinger, Director (Appellant) Maguire & McInerney (Respondent) File Number(s): AP 17/18228 Publication restriction: Unrestricted Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 03 April 2017 Before: P Boyce, Senior Member File Number(s): HB 16/06736 Reasons for Decision 1. On 20 December 2017 the Appeal Panel in this Appeal made orders: 1. Leave to appeal where necessary refused. 2. Appeal is dismissed. 3. Stay Order made on 12 May 2017 is lifted. 4. Any application for costs is to be made in writing to the Tribunal (with a copy to the other party) within 14 Days of the date of publication of these reasons for decision and to be accompanied by a submission. 5. Any submission in response to the costs application is to be provided to the Tribunal and the other party within 14 days of receipt of the costs application. 6. Any submission in reply is to be made within 7 days thereafter. 7. The submissions on costs are to include reference to whether the issue of costs can be determined on the papers without a hearing. 1. This decision concerns the application by the respondent homeowners pursuant to Order 4, that the appellant builder pay the homeowners' costs of the appeal proceedings. 2. Submissions were made by the homeowners on 16 January 2018, by the builder in response on 30 January 2018, and by the homeowners in reply on 16 February 2018. 3. An initial consideration is the issue raised in the builder's submissions that because leave was not granted pursuant to section 45 of the Civil and Administrative Tribunal Act 2013 (the Act) for the parties to be legally represented in the course of the initial proceedings, the "power under which costs at first instance could be ordered had not been enlivened". 4. The contention proceeds upon the basis that the "first instance costs provisions", see Rule 38A, included the alleged precondition that there be an application for, and direction by the Tribunal, that a party be represented by an Australian legal practitioner. This submission involves a somewhat circuitous passage through the provisions of the Act and the Rules. 5. This internal appeal concerned the decision by the Tribunal at first instance dated 3 April 2017. 6. In a subsequent order as to the costs of the first instance proceeding the Tribunal made an order dated 14 September 2017: The Tribunal orders that the builder N & T Buildings Pty Ltd, pay to the homeowners, Clifford Ball and Carmel Ball their costs as agreed or assessed on the ordinary basis. 1. The Appeal Panel notes that there was no appeal concerning the above order, and that the subsequent costs order by the Tribunal did not form any part of these internal appeal proceedings. 2. Further, the Appeal Panel in these proceedings constituted by M Harrowell, Principal Member, made directions on 11 May 2017, including: 1. Leave is granted to the Appellant to be legally represented. 2. Leave is granted to the Respondent to be legally represented. 1. The Appeal Panel recognises that while there might possibly have been an arguable case that the order of the Tribunal made on 14 September 2017 was beyond power, for the reasons addressed in the builder's submissions dated 29 January 2018, there was, however, no appeal pursued by the builder in relation the those orders. 2. The builder, in its submissions in support of the contention at [4] relies upon there being a precondition to an order as to costs under Rule 38 and 38A of the Civil and Administrative Tribunal Rules 2014 (Rules), that there be a grant of leave in the first instance proceedings to be represented by a legal practitioner. 3. There are a number of reasons why the Appeal Panel does not accept that there is such a precondition. The first is that section 45 does not limit representation by a party only to legal practitioners. Secondly the Appeal Panel does not accept that an order for payment of costs under any of the provisions of the Act or the Rules applies only to the costs incurred by a party paid to a legal practitioner. 4. Section 38(5)(c) of the Act addresses procedural fairness and provides: The Tribunal is to take such measures as are reasonably practicable: … (c) to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings. 1. Section 45 of the Act addresses the representation of parties before the Tribunal and relevantly provides: Section 45 Representation of parties (1) A party to proceedings in the Tribunal: (a) has the carriage of the party's own case and is not entitled to be represented by any person, and (b) may be represented by another person only if the Tribunal grants leave: (i) for that person to represent the party, or (ii) in the case of representation by an Australian legal practitioner—for a particular or any Australian legal practitioner to represent the party. (2) However a party to an internal appeal (or in an application for leave to make an internal appeal) may be represented by a person without requiring leave of the Appeal Panel if the party was entitled to be represented by such a person without the leave of the Tribunal in the proceedings in which the decision under appeal was made. (3) The Tribunal may at its discretion: (a) grant or refuse leave under subsection (1) (b), and (b) revoke any leave that it has granted. 1. Part 7, Division 2, Rules 31 and 32 provide: Division 2 Representation of parties 31 Application for leave to represent a party (1) An application by a person under section 45 of the Act for leave to represent a party to proceedings may be made orally or in writing at any stage in the proceedings. (2) In making an order granting leave to a person to represent a party to proceedings, the Tribunal may impose such conditions in relation to the representation as the Tribunal thinks fit. 32 Granting and revocation of leave for a person to represent party (1) In dealing with an application under section 45 of the Act for leave to be granted to a person (other than an Australian legal practitioner) to represent a party to proceedings, the Tribunal is to have regard to: (a) such of the following circumstances as it considers are relevant to the proceedings: (i) whether the proposed representative has sufficient knowledge of the issues in dispute to enable him or her to represent the applicant effectively before the Tribunal, (ii) whether the proposed representative has the ability to deal fairly and honestly with the Tribunal and other persons involved in the proceedings, (iii) whether the proposed representative is vested with sufficient authority to bind the party, and (b) any other circumstances that it considers relevant. 33 Costs of representation may be disclosed Without limiting Rule 31(2), the Tribunal may, as a condition of an order granting leave to a person (including an Australian legal practitioner) to represent a party to proceedings, require the person to disclose the estimated costs of representation by the person. 1. Clause 38 of the Rules 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. Clause 38A of the Rules states 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 Appeal Panel considers that the past potential argument which the builder may have had, as to the costs of the first instance proceedings, has no relevance to the issues as to the costs of these internal appeal proceedings. 2. There is a clear recognition in the Act, and the Rules, that a party may be entitled to an order in their favour that the other party pay their costs of the proceedings, including costs incurred, other than by payments to legal practitioners. 3. Further, in the opinion of the Appeal Panel, there is a recognition that costs, incurred by a party and paid to a person granted leave to represent the party, who is not an Australian legal practitioner, may be recovered under an order for costs. In home building proceedings conducted in the Consumer and Commercial Division of the Tribunal, parties will frequently be required to engage expert witnesses, the costs of whom could form part of recoverable costs under an order that the other party pay the costs of the proceedings. 4. It has also been recognised that the engagement of a legal practitioner, to advise and assist, but not to appear as a representative, might be recoverable under a costs order: see Draper v Gibbs [2014] NSWCATAP 54. 5. The Tribunal notes the concession by the builder that, if the Appeal Panel does not accept the contention, as to the application of a precondition for an entitlement to a costs order, see [4], the issues in this decision are subject to Rule 38, because the first instance proceedings were for an amount exceeding $30,000.00. The amount ordered be paid in the first instance proceedings was, in fact, $112,899.00. 6. The Tribunal recognises that the operation of Rule 38 involves the exercise of a legally-principled discretion. In Thompson v Chapman [2016] NSWCATAP 6 the Appeal Panel identified the factors involved: 67 …… in circumstances where there is a general discretion to award costs, the correct statement of principle is that the Tribunal in exercising its discretion is to have regard to the nature of the proceedings before it and all relevant factors arising in connection with those proceedings for the purpose of determining what order for costs, if any, should be made. 68 Each of Regulation 20 of the CTTT Regulation and Rule 38 provide a general discretion in respect to the award of costs. 69. The starting point in exercising such discretion is that the "usual order for costs" is that a successful party should be entitled to an order for cost in their favour: see Latoudis v Casey [1990] 170 CLR 534 per Mason CJ at 554 and Oshlack v Richmond River Council per McHugh J at 97. 70. The reason for such an order is that it is appropriate for the party who incurred costs caused by the other party in litigation to be reimbursed. Further, an award of costs by way of indemnity to the successful party: see Latoudis v Casey per Mason CJ at 543 and McHugh J at 567 and in Oshlack v Richmond River Council per Brennan CJ at 75. 71. Where there is a general discretion for costs there is no absolute rule that, absent disentitling conduct, a successful party is to be compensated by the unsuccessful party nor is there any rule that a successful party might not be ordered to bear the costs of an unsuccessful party: see Oshlack v Richmond River Council per Gaudron and Gummo JJ at 88 and Kirby J at 121 – 123. 72. The factors to be considered in awarding costs in a particular case are not to be confined as to do so would constrain the general discretion. However it is clear from the authorities that factors that might influence whether the usual order for costs should apply and, if so, to what extent include: 1. Whether, by reason of the relative success of the parties on different issues and the time taken to determine those that an order for costs based on issues should be made: see for example Bostick Australia Pty Ltd v Liddiard (No 2) [2009] NSWSCA 304; and 2. Whether, by reason of the nature of the proceedings the usual rule should otherwise be displaced in whole or in part: see Oshlack v Richmond River Council per Gaudron and Gummo JJ at 41 – 44. 73. An example of such an exception was the case of Dee-Tech, a claim for relief against forfeiture. In that case the Court determined that the entitlement of the lessee (Dee-Tech) to exercise an option for renewal required the favourable exercise of a discretion under s 133(F) of the Conveyancing Act 1919. In that case, White J said at [69]: The fact that Dee-Tech was in breach of the lease and was not entitled to exercise its option of renewal except for a favourable exercise of discretion under s 133F, is a reason why costs need not follow the event. On the other hand, the fact I found it entitled to conditional relief against forfeiture is a reason why it should have at least a proportion of its costs, reflecting the extent to which costs were increased by Needam Holdings' resistance to its claim. 74. However, as White J made clear in Dee-Tech, these are but some of the factors which need to be considered and weighed against each other in determining what order for costs should be made. Other factors considered by White J included whether or not the resistance of Neddam Holdings "went beyond what was reasonable" and pursued issues unsuccessfully and that Neddam was not successful on the predominate issues litigated: per White J at [70] – [71]. Further, the case of Dee-Tech is an example of those cases referred to in Oshlack where, by reason of the nature of the relief sought, it is appropriate for a claimant to pay the costs of the respondent at least up until the stage where the conduct of the respondent and/or issue put into dispute make it just and reasonable for the respondent to pay the successful applicant's costs. 75. That is not to say that, in all circumstances, an applicant who first requires an order in their favour in order to obtain the relief sought should be deprived of the whole or even part of their costs of the proceedings. Each case must be determined on its own facts and where the parties may, without order of a Court or Tribunal, agree to resolve all issues between themselves prior to the commencement of any proceedings, this is also a matter which needs to be considered in determining the proper exercise of any discretion in connection with the award of costs. 76. In short, the proper exercise of the discretion requires the Tribunal to do justice between the parties and to exercise the discretion having regard to relevant considerations and in a manner which is not arbitrary or capricious: see Oshlack v Richmond River Council per Gaudron and Gummo JJ at [22] and McHugh J at 65. 1. The homeowners first identified the fact that there were nine grounds of appeal, two of which were abandoned at the hearing. The builder was entirely unsuccessful in relation to the remainder of grounds. Further, there was no disentitling conduct on the part of the homeowners which could justify a departure from the presumption of an order that costs should follow the event. 2. The builder refers to a number of factors which stem from the assumption by the builder that the only relief sought was an order for rectification under section 48MA of the Home Building Act 1989. This is said to have been induced by some action on the part of the homeowners' expert. It is also submitted that a relevant factor was that the builder was not legally represented and was at a disadvantage in the hearing at first instance. The latter factor is, it seems, said to be in some way attributable to a failure on the part of the homeowners to seek an order that they be legally represented. 3. The Appeal Panel does not accept that any of the factors relied upon by the builder in seeking to avoid the consequence that costs should follow the event, are matters which could justify a legally-principled departure from the general rule. None of the factors can realistically be attributed to the homeowners. All of the matters raised were the product of mistaken assumptions by the builder, particularly as to whether legal advice ought to be sought in proceedings involving technical complexities and a substantial amount of money. 4. The Appeal Panel concludes that the builder should pay the homeowners' costs as agreed or assessed on the usual basis. Orders 1. The Appellant shall pay the costs of the Respondents on the usual basis. ******** 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 Amendments 16 April 2018 - typographical error - Date of Orders and Decision corrected. 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: 16 April 2018