Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Zeait v Singh [2018] NSWCATAP 109 Hearing dates: On the papers Date of orders: 10 May 2018 Decision date: 10 May 2018 Jurisdiction: Appeal Panel Before: R Titterton, Principal Member Dr J Lucy, Senior Member Decision: 1. Appeal dismissed. 2. Leave to appeal refused. 3. The respondent to file submissions as to costs on or before 24 May 2018. 4. The appellant may respond on or before 7 June 2018. Catchwords: COSTS – Application of r 38(2) of the Civil and Administrative Tribunal Rules 2014 – meaning of "the amount claimed or in dispute in the proceedings is more than $30,000" Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 (NSW) Civil and Administrative Tribunal Regulation 2013 (NSW) Cases Cited: Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Champion Homes Pty Ltd v Guirgis [2018] NSWCATAP 54 House v Defence Force Retirement and Death Benefits Authority (2011) 193 FCR 112 Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 Matterson v Sunrise Pools Australia Pty Ltd [2017] NSWCATAP 211 Moloney v Collins [2011] NSWSC 628 Thompson v Chapman [2016] NSWCATAP 6 Category: Costs Parties: Rony Zeait t/as AAA Perfect Excavation & Demolition (Appellant) Vikramjit Singh (Respondent) Representation: Solicitors: Appellant: G Adelstein, Elmassian Lawyers Respondent: R Kent, Kent Lawyers File Number(s): AP 18/1142 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 7 December 2017 Before: C Paull, Senior Member File Number(s): HB 15/07518 and HB 15/32783 REASONS FOR DECISION Introduction 1. This is an appeal from a decision of the Consumer and Commercial Division of the Tribunal (the Tribunal) of 7 December 2017 (the Costs Decision). The Costs Decision concerned the costs of matters HB 15/07518 (the homeowners' application) and HB 15/32783 (the builder's application). The Tribunal ordered the builder to pay the homeowners' costs in both applications. 2. On 15 August 2017, the Tribunal had: 1. ordered that, in the homeowners' application, the respondent (acting as agent for the homeowners) and the two homeowners were not required to pay the appellant (the builder) $21,120, and otherwise dismissed the homeowners' application; 2. dismissed the builder's application, (the Primary Decision). 1. With the agreement of the parties, this appeal has been determined "on the papers" and without a hearing, pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NCAT Act). 2. For the following reasons, we have decided to dismiss the appeal. The issue 1. The Tribunal provided brief written reasons for the Costs Decision. Relevantly, the reasons stated: When the dispute initially came before the local court by way of the builders application, the builder sought approximately $30,000 plus interest. When the builder's application was transferred to the Tribunal it was joined and listed with the application that had been filed by the homeowners, who sought relief from having to pay the amount sought by the builder plus damages of $6000. When the matter came before the Tribunal for substantive hearing the dispute centred around the builder's claim for $21,250 plus interest; and the homeowners claim for relief from having to pay the builder $21,250 plus interest and damages of $6000. As such I find that the costs application falls to be considered under Rule 38(2) of the NACAT [sic] legislation. I have considered the Tribunal's findings, the submissions put before the Tribunal as to costs in particular as to the matters raised as to the builder's credibility; the length of time taken in conducting the proceedings as a result of the way the parties chose to conduct their respective cases, including matters relating to interlocutory matters. Ultimately, the homeowners were successful in defending the builder's entire claim for payment of money and obtaining relief from having to pay the builder the money he sought. As such I find that in accordance with the usual principle that costs follow the event, the builder should pay the homeowners costs as agreed or assessed. 1. The reference to the "Rule 38(2) of the NACAT legislation" is a reference to r 38(2) of the Civil and Administrative Tribunal Rules 2014 (NCAT Rules). 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. The reference to "section 60 of the Act" appearing in r 38(2) is a reference to s 60 of the NCAT Act. Section 60 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. For r 38(2) to apply, the Tribunal needed to be satisfied (relevantly – there is no issue that r 38(2)(a) applies), that "the amount claimed or in dispute in the proceedings [was] more than $30,000". 2. The issue to be determined is whether or not the Tribunal erred in being satisfied that the rule in s 38(2)(b) applied. The Notice of Appeal and the builder's submissions 1. The builder's grounds of appeal are stated in the Notice of Appeal as: 1. Tribunal misapplied section 38(2) in that the matter was conducted in the Tribunal for an amount under $30,000. 2. There were special circumstances that would warrant a cost order against the builder. 3. The cost decision is not fair and equitable in the circumstances given the delays occasioned by the home owners lawyers. 4. The bill of the homeowners lawyers legal cost have to date not been provided, and a failure to do so is not fair and equitable in the circumstances. 1. The builder states that he is asking for leave to appeal, as the Costs Decision was not fair and equitable. However, the appeal raises a question of law, namely the application of the correct costs rule, and leave to appeal is not required: s 80 of the NCAT Act. 2. The grounds of appeal are amplified in the builder's submissions. In summary, the builder submits r 38(2)(b) is qualified by the words "claimed or in dispute"; for this rule to apply, the Tribunal needed to have found that the amount claimed or in dispute exceeded $30,000. The builder submits that there is an absence of reasoning to establish that "the amount in dispute" satisfied the wording of r 38(2)(b), particularly given that the Tribunal's primary decision indicated that the homeowners were not required to pay the builder $21,120.00. 3. The builder's submissions raise a separate ground of appeal, being inadequate reasons given by the Tribunal ("without exposing any reasoning, the Member found that the cost application fell to be considered under Rule 38(2)"). An alleged failure to give adequate reasons also constitutes a question of law (see Matterson v Sunrise Pools Australia Pty Ltd [2017] NSWCATAP 211 at [52] and the authorities there referred to). 4. Finally, the builder submits that if his appeal is successful the matter should be remitted to the Tribunal to consider whether or not there are special circumstances to justify a departure from the general rule that no costs should be awarded. Alternatively, the builder submits that the Appeal Panel should order that each party pay their own costs of the proceedings before the Tribunal. The Reply and the homeowners' submissions 1. In their Reply, the homeowners say that they support the orders of the Tribunal, which they submit are correct, and that the Tribunal's reasons were not inadequate. The homeowners also submit that the appeal was not filed within the 28 days provided for in the NCAT Rules. Consideration Preliminary issue - Appeal out of time 1. Rule 25(4)(c) of the NCAT Rules relevantly provides that appeals should be filed within 28 days from the day on which the appellant was notified of the decision to be appealed or given reasons for the decision (whichever is the later). The Decision was made on 7 December 2017. The builder states in his Notice of Appeal that it was received on 11 December 2017. If that is correct, the Notice of Appeal should have been filed by 8 January 2018. Accordingly, as the Notice of Appeal was filed on 5 January 2018, it was filed within the time contemplated by the Rules. 2. However, at the time the Decision was published, the builder was represented by lawyers. We note that the copy of the Decision with which we have been provided suggests that the Decision was sent to the builder's lawyers by the Tribunal Registry by email on 7 December 2017. If that is correct, then the 28 days commenced then and the Notice of Appeal should have been filed by 4 January 2018; that is, it was filed one day late. 3. The principles for the extension of time are well known: see Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 at [22]. Generally, in an application for an extension of time to appeal, the Appeal Panel will be required to consider the length of the delay; the reason for the delay; the appellant's prospects of success, that is, usually whether the applicant has a fairly arguable case; and the extent of any prejudice suffered by the respondent (to the appeal). 4. The builder submits, when providing reasons for the delay in appealing, that he mailed the Notice of Appeal to the Tribunal on 26 December 2017. He says the delay is explicable due to the Christmas holiday break, in that mail may have taken longer to reach its destination and Tribunal staff may not have been available in sufficient numbers to process it upon arrival. 5. There is insufficient evidence before us to allow us to conclude on the balance of probabilities when the builder received notice of the Costs Decision and when he sent the Notice of Appeal to the Tribunal. As our decision is being made "on the papers" and without a hearing, we have been unable to discuss these matters with the parties. In the circumstances, an extension should be granted because the length of the delay is short, being at worst only one day, and the grounds of appeal are arguable. We also note that there were public holidays during the 28 day period and that it is feasible that the mail was slower during this time. Ground 1 – application of r 38(2) 1. We turn now to the substance of the appeal. In summary, while we think that the reasons may be characterised as brief, the conclusion reached by the Tribunal was correct. We agree, for the following reasons, that the amount claimed or in dispute in the proceedings was more than $30,000. 2. It is appropriate to set out our analysis of what was claimed in the two proceedings which were heard together. 3. In the builder's application, having initially claimed payment for unpaid work in the sum of $30,030.00, the builder claimed payment of $21,120.00. This is the amount that the Tribunal found in the Primary Decision that the homeowners did not have to pay. We note that the homeowners submit that the amount the builder claimed at the hearing was actually $21,930.00. However, the Primary Decision relates to payment of $21,120, and until that figure is varied on appeal, we will consider that to be the amount claimed at the hearing. In addition, this lower figure favours the builder's submission that the amount claimed or in dispute was less than $30,000. 4. The builder also sought interest pursuant to the terms of the building contract. The Primary Decision does not state what amount was actually sought, nor do the builder's appeal submissions. However, the homeowners' submissions state that the builder's submissions to the Tribunal stated that the interest to 7 April 2017 was $3,643.00, and calculates that the interest to the date of the Primary Decision would have been $4,581.05. In the absence of the builder disputing this on appeal, we will assume therefore that the contractual interest claimed was $4,581.05. 5. Accordingly, the amount claimed or in dispute in the builder's application was $25,701.05. 6. In the homeowners' application, the homeowners sought: * relief from paying builders' initial claim of $21,120 for unpaid work; * relief from paying the builder's claim of interest (calculated to be) $4,581.05; * damages of $6,000.00. 1. Accordingly, the amount claimed or in dispute in the homeowners' application was $31,701.05. 2. The builder submits that the amount claimed or in dispute in the proceedings does not exceed $30,000 as par [1] of the Primary Decision indicates that the homeowners were not required to pay the builder $21,120.00. While the submission refers to par [1] of the Primary Decision, the builder is actually referring to the first order on the coversheet of the Primary Decision. That order states: In Application HB 15/07518 the [homeowners] are not required to pay the [builder] $21,120.00. The application is otherwise dismissed. 1. We do not accept the builder's submission. The submission ignores the homeowners' claim for relief, damages, his claim for interest, and the homeowners' own claim for interest. As we have determined above, the amount claimed or in dispute in the homeowners' application was $31,701.05, an amount of more than $30,000.00. That being the case, the Tribunal was correct to find that s 38(2)(b) was the relevant costs rule applicable in the homeowners' proceeding. 2. The Tribunal states in the Primary Decision at [7] that an order was made "joining the homeowners as respondents" to the builder's application. It is a little unclear what the Tribunal meant, as the homeowners were already the respondents to the builder's application, by reason of being named as such in the Local Court statement of claim. What is clear is that the proceedings were heard together (Primary Decision at [8] and the Primary Decision generally). 3. We reject the submission that the two applications were consolidated, as there is no provision in the NCAT Act, NCAT Rules or Civil and Administrative Tribunal Regulation 2013 for consolidation of proceedings. We note that in Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [38], the Appeal Panel commented that nothing in the NCAT Act or the NCAT Rules suggests that "when … proceedings are heard together there is only one set of proceedings rather than two or more separate proceedings." We consider that the builder's application was one proceeding, and the homeowners' application was another, even though they were heard together. 4. As the amount in dispute in the builder's application was under $30,000, r 38(2)(b) did not apply to that proceeding. However, the builder's application substantially overlapped with the homeowners' application. The builder claimed payment of $21,120 in the builder's application, and the homeowners' claimed relief from payment of that amount in their application. Whilst the builder also sought interest in his application, we do not consider that this added significantly to the costs of the proceedings. Given that the dispute in both proceedings was essentially the same, it would not be fair, in this case, to deprive the homeowners of their costs, or to apply a different rule in respect of that part of the hearing which was attributable to the builder's claims. This is because, if the homeowners' case had been heard separately, it is very unlikely to have taken much less time or cost much less, in the circumstances where the primary dispute was the same in both. Other grounds of appeal 1. We do not consider that there is any substance in the other grounds of appeal set out in the Notice of Appeal. 2. Ground 2 (that there were special circumstances that would warrant a cost order against the builder) does not arise as the costs rule in s 60 of the NCAT Act is not the correct costs rule to apply. 3. Ground 3 (that the cost decision is not fair and equitable in the circumstances given the delays occasioned by the homeowners' lawyers) does not raise a question of law, and leave to appeal is required. This ground is unsupported by evidence on appeal and must be rejected. 4. Ground 4 (that the bill of the homeowners' lawyers' legal costs have to date not been provided, and a failure to do so is not fair and equitable in the circumstances) is not an intelligible ground of appeal. 5. The final ground of appeal is that the reasons for the Costs Decision were inadequate. The Senior Member states that, in coming to her decision, she had considered her findings, the submissions before her, the builder's credibility, the length of time taken in conducting the proceedings and other (unspecified) interlocutory matters. She concludes that "[u]ltimately, the homeowners were successful in defending the builder's entire claim for payment of money and obtaining relief from having to pay the builder the money he sought", and then states: As such I find that in accordance with the usual principle that costs follow the event, the builder should pay the homeowners costs as agreed or assessed. 1. While the Tribunal mentioned a list of matters in its reasons, none of these matters, either individually or cumulatively, were considered in any detail by the Tribunal in reaching its decision to award costs. Johnson J observed in Moloney v Collins [2011] NSWSC 628 at [63] that while failure to give reasons as required by law may itself disclose error of law, the extent and content of the reasons required will depend upon the particular case and the issues under consideration. His Honour stated at [64] that the duty does not require the trial Judge to spell out in minute detail every step in the reasoning process or refer to every single piece of evidence. It is sufficient if the reasons adequately reveal the basis of the decision, expressing the specific findings that are critical to the determination of the proceedings. 2. It is correct that, where costs may be awarded (in this case because of the operation of r 38(2)), the "usual rule" is that costs follow the event. However, there is in fact a general discretion as to whether or not costs should be awarded: Champion Homes Pty Ltd v Guirgis [2018] NSWCATAP 54 at [83]. As the Appeal Panel noted in Thompson v Chapman [2016] NSWCATAP 6: 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 costs in their favour: see Latoudis v Casey [1990] HCA 59; [1990] 170 CLR 534 per Mason CJ at 554 and Oshlack v Richmond River Council per McHugh J at 97. . . . 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 Gummow 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 Gummow JJ at 41 – 44. 1. The reasons in the Costs Decision were brief. However, while not stated explicitly, we consider that it is implicit in the reasons of the Tribunal that the Senior Member considered that by reason of the nature of the finalized proceedings the usual rule should not be displaced. We draw that inference by reason of the Tribunal's express reference to: 1. the homeowners being successful in defending the builder's entire claim for payment of money and obtaining relief from having to pay the builder the money he sought; and 2. the length of time taken in conducting the proceedings as a result of the way the parties chose to conduct their respective cases, 1. both of which are matters referred to in [72(1)] of Thompson v Chapman. Costs of the Appeal 1. The homeowners have asked for the opportunity to consider making an application for costs of the appeal. They should file submissions within 14 days of receiving these reasons. The builder should respond within a further 14 days. The submissions should address r 38A of the NCAT Rules. We consider that any costs application should be determined on the papers and without a hearing, but if either party thinks otherwise, they should address that issue in their submissions. Orders 1. For the following reasons, the Appeal Panel orders: 1. Appeal dismissed. 2. Leave to appeal refused. 3. The respondent to file submissions as to costs on or before 24 May 2018. 4. The appellant may respond on or before 7 June 2018. ********** 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: 10 May 2018