Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Abed v Cosgrove t/as Alison Arts; Cosgrove v Abed (No 2) [2018] NSWCATAP 133 Hearing dates: On the papers Date of orders: 30 May 2018 Decision date: 30 May 2018 Jurisdiction: Appeal Panel Before: L Robberds QC, Senior Member G Sarginson, Senior Member Decision: 1. An oral hearing is dispensed with under s 50(2) of the Civil and Administrative Tribunal Act 2013 and the matter is determined on the papers. 2. The Appeal Panel orders that in matter AP 17/26175 the appellant Alison May Cosgrove pay the costs of the respondent Maria Abed on a party/party basis, such costs to be 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). Catchwords: COSTS---Special circumstances---Unsuccessful cross appeal---Special circumstances established ---Applicable principles Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 (NSW) Fair Trading Act 1987 (NSW) Legal Profession Uniform Law Application Act 2014 (NSW) Cases Cited: ACT Builders Pty Ltd v Haridemos (No 2) [2016] NSWCATAP 118 Allen v TriCare (Hastings) Pty Ltd [2017] NSWCATAP 25 Cripps v G & M Mawson [2006] NSWCA 84 Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 Stankovic v State of NSW (No 2) [2016] NSWSC 335 Category: Costs Parties: In Matter AP 17/19509 Maria Abed (Appellant) Alison May Cosgrove t/as Alison Arts (Respondent) In Matter AP 17/26175 Alison May Cosgrove (Appellant) Maria Abed (Respondent) Representation: Counsel: Nil Solicitors: J Wilson, Baker Love (Appellant/Cross Respondent) File Number(s): AP 17/19509 and AP 17/26175 Publication restriction: Nil Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 30 March 2017 Before: D Moss, General Member File Number(s): GEN 16/14695 REASONS FOR DECISION 1. The dispute involves the provision of artwork upon the panels of a 2011 model Holden Commodore SS-V station wagon. There was an appeal by the consumer ('Abed'), and the supplier of the services ('Cosgrove') sought leave to extend the limitation period to file an appeal. The matters were heard (including a stay application by Cosgrove) in the Appeal Panel on 10 July 2017 and 8 August 2017. 2. On 3 January 2018, the Appeal Panel published its decision and reasons. Abed's appeal was dismissed. Cosgrove was refused leave to extend the limitation period to file an appeal and the appeal was dismissed. Abed was legally represented in the Appeal Panel proceedings. Cosgrove was self-represented. 3. The Appeal Panel made directions for the manner in which the issue of costs was to be determined involving the provision of written submissions. 4. On 11 January 2018, Abed filed and served written submissions seeking its costs of the cross-appeal in Matter AP 17/26175. No application for costs was made in Matter AP 17/19509. On 9 February 2018, Cosgrove filed written submissions. On 15 February 2018, Abed filed submissions in reply. Both parties consented to the issue of costs being determined on the papers, and we are satisfied that a further oral hearing is not required. Jurisdiction Of The Appeal Panel On The Issue Of Costs And Applicable Legal Principles 1. Section 60 of the Civil and Administrative Tribunal Act 2013 (NSW) ('the NCAT Act') states as follows: 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. (4) If costs are to be awarded by the Tribunal, the Tribunal may: (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be 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) or on any other basis. (5) In this section: costs includes: (a) the costs of, or incidental to, proceedings in the Tribunal, and (b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal. 1. Rule 38 of the Civil and Administrative Rules 2014 ('the NCAT Rules') states as follows: 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 of the NCAT Rules states as follows: 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. In the Appeal Panel proceedings, Abed's appeal involved an amount in dispute of over $30,000.00, because in the proceedings below, Abed claimed an amount in excess of $30,000. However, there were no proceedings below involving a cross claim by Cosgrove, because the Tribunal did not have jurisdiction under Part 6A of the Fair Trading Act 1987 (NSW) in this regard (Cosgrove being the supplier of services rather than the recipient of services). 2. In respect of the cross appeal by Cosgrove, Cosgrove sought an order overturing the decision of the Member below to award Abed $10,897.50 and asserting that there had been no breach by Cosgrove of any provision of the Australian Consumer Law 2010, or any other relevant cause of action asserted by Abed. 3. Whether the amount in dispute in Cosgrove's cross appeal exceeds $30,000.00 depends upon whether there is a realistic prospect the wealth of Cosgrove would be changed by more than $30,000.00 if Cosgrove was successful in the cross-appeal (Allen v TriCare (Hastings) Pty Ltd [2017] NSWCATAP 25 at [57]). Had Cosgrove succeeded in the cross-appeal, there is no realistic prospect Cosgrove's wealth would have changed by more than $30,000 as the decision which Cosgrove appealed against was that Cosgrove pay Abed $10,897.50, with no order having been made regarding costs. No order was made at first instance under cl 10 (2) of Sch 4 of the NCAT Act. 4. Accordingly, r 38 of the NCAT Rules does not apply to the cross appeal, and the provisions of s 60 of the NCAT Act apply. For Abed to succeed in obtaining a costs order, Abed must show there are "special circumstances". "Special circumstances" are circumstances which are out of the ordinary but not necessarily extraordinary or exceptional: see eg Cripps v G & M Mawson [2006] NSWCA 84 and Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120. Section 60 (3) of the NCAT Act sets out the matters which may be considered to establish whether or not there are special circumstances. Each case depends upon its own particular facts. 5. Abed submits that there are special circumstances that warrant an order that Cosgrove pay the costs of the cross appeal for the following reasons: 1. Cosgrove's appeal was "retaliatory" and only filed when Cosgrove realised that there was a prospect that Cosgrove may be liable for more than $10,897 if Abed's appeal was successful. 2. The late filing of Cosgrove's cross appeal caused the hearing of the appeal and the cross appeal to be part heard to a further date. If the cross appeal had not been filed late, no further hearing date in the Appeal Panel would have been required. 3. Cosgrove's written submissions on the cross appeal raised numerous allegations that Abed had conspired with her expert witnesses to "inflate" estimates to repair Abed's vehicle, and Abed's expert witnesses were not independent. Such claims were vexatious and required Abed's lawyer to spend "significant" time addressing the allegations in written submissions. 4. Cosgrove's grounds of cross appeal were weak in substance, and there was little prospect that Cosgrove would obtain leave to extend the limitation period to file the cross appeal, or succeed on the cross appeal. 1. Abed sought a lump sum costs order of $11,270 and provided an itemised schedule of costs prepared by Abed's Solicitor. 2. Cosgrove denies that there are special circumstances that warrant an order for costs. Cosgrove's submissions can be summarised as follows: 1. Cosgrove had made an offer to settle proceedings on the basis that there be an "exchange" with Cosgrove providing "another identical model of similar klms and condition including exchange of engine, suspension, exhaust and wheels" or "discussing" Cosgrove having the vehicle re-painted "through our industry contacts whom are experienced, licensed, professionals" (email of S Cosgrove to Abed's Solicitor dated 19 June 2017). Abed had rejected the offer and made an offer of $25,000.00 in full and final settlement of the proceedings. 2. Cosgrove's conduct had not unreasonably delayed the matter in the Appeal Panel, or caused the unreasonable escalation of costs. The first hearing date in the Appeal Panel was to deal with Abed's appeal and Cosgrove's application for a stay of the original orders. No directions had been made to deal with the cross appeal. Abed's appeal was not finalised on the first hearing date in the Appeal Panel in any event, and the second day included further submissions that dealt with both Abed's appeal and Cosgrove's cross appeal. 3. Cosgrove did not accept that the cross appeal had little merit. 4. Cosgrove submitted that the schedule of costs was inflated, and included items that were not solely confined to the cross appeal. 1. Abed's submissions in reply can be summarised as follows: 1. Abed continued to submit that, had Cosgrove filed and served the cross appeal within time, directions regarding the filing and serving of submissions could have been made at the call-over of Abed's appeal, and all issues (including the stay application by Cosgrove) could have been dealt with at the first Appeal Panel hearing date. 2. It was Abed's "understanding" that Cosgrove had, at the conclusion of the first day of the hearing in the Appeal Panel sought that there be oral argument on the cross appeal, rather than the cross appeal being dealt with on the basis of written submissions. 3. There was nothing unreasonable about Abed refusing Cosgrove's offers. 4. The estimate of costs by Abed's Solicitor was not inflated. Have Special Circumstances Been Established? 1. In an application for costs made pursuant to s 60 (2) of the NCAT Act, the essential matter which the Appeal Panel is required to determine is whether or not there are special circumstances warranting an award for costs. 2. It is to be noted that with the exception of s 60 (3) (g), the factors to be considered relate to the appeal proceedings and not to the success or otherwise of the appellant in those proceedings at first instance. The mere fact of an appeal, even if unsuccessful, is not of itself sufficient to establish there are special circumstances to enliven the power to award costs on appeal pursuant to s 60 (2) (ACT Builders Pty Ltd v Haridemos (No 2) [2016] NSWCATAP 118 at [41]). 3. So far as s 60 (3) (c) is concerned the question to be determined is the relative strengths of the parties' cases, an extreme case being where an appeal has no tenable basis in fact or law. The relative strengths of the parties' positions needs to be considered by reference to the claims made and the Appeal Panel's decision (Haridemos (No 2) at [46]). Abed's Claim 1. One of the major questions in the proposed cross-appeal by Cosgrove was the prospects of her success on that proposed cross-appeal (see par 77 of our reasons for decision dated 3 January 2018). 2. Matters relevant to that question were whether Clear Coat needed to be applied within 8 – 12 hours and whether failure to do so would leave the substrate unprotected with no chance of future coatings correctly adhering to the paintwork. Abed's experts were Mr Judd and Mr Crawford. 3. Mr Judd stated that Clear Coat needed to be applied within 8 – 12 hours and failure to do so would leave the substrate unprotected with no chance of future coatings correctly adhering to the paintwork (par 85 of our reasons dated 3 January 2018). 4. Mr Crawford stated that in his opinion, to rectify the vehicle (with a paint warranty provided) the murals would have to be removed back to a suitable substrate, (OEM finish); the vehicle would have to be repaired and repainted; the murals would have to be reapplied; and the vehicle would have to be Clear Coated within a timeframe stated by the coating company, normally 10 – 12 hours (par 74 of the General Member Moss' reasons and par 88 of our reasons dated 3 January 2018). 5. In our view this evidence demonstrated that Abed had a strong case on these matters and on the question of Cosgrove's prospects of success. Cosgrove's Claim 1. Cosgrove relied upon the evidence of Mr Schuster to answer the evidence of Mr Judd and Mr Crawford. Mr Schuster's evidence was that his company had a product called FX Intercoat Clear which if applied would rectify fine scratches and provide a base for Clear Coat to be applied. His relevant evidence is set out in par 87 of our reasons dated 3 January 2018. 2. Analysis of that evidence shows that it was contingent on the depth of the scratches; whether the airbrush work was in a sound enough condition; and whether the vehicle had been stored in a good enough way. He stated that the DNA Intercoat product being applied after 2 years was not ideal and whether or not the product would rectify the defects and allow Clear Coat to be applied was almost a hypothetical question. 3. There was also evidence of email correspondence between Mr Cosgrove and Mr Crawford in which Mr Crawford explained that Concept Paints (Mr Crawford's company) or any other company would not warrant another company's material being applied over the top of another (par 89 of our reasons dated 3 January 2018). 4. In our view this evidence demonstrates that Cosgrove had a weak case on the question of her prospects of success. Have Special Circumstances Been Established? 1. The claim made by Cosgrove was in effect that the evidence of Mr Schuster showed that after using FX Intercoat Clear, Clear Coat could be applied to the vehicle and there would be no resulting damage to the vehicle arising from the fact that Clear Coat was not originally applied within 8 – 12 hours. That claim was not accepted by the Appeal Panel. 2. When the relative strengths of the parties' cases on this critical question of Cosgrove's prospects of success on the proposed cross- appeal are considered by reference to the claims made by the parties and the Appeal Panel's decision (Haridemos at [46]), in our opinion Abed has established special circumstances and in matter AP17/26175 an order that Cosgrove pay the costs of Maria Abed on a party/party basis is appropriate. 3. Having been satisfied that the Cosgrove's prospects of success (including the prospect of having the limitation period to bring the cross appeal extended, the cross appeal having been filed out of time) were sufficiently weak for Abed to establish special circumstances, it is unnecessary to consider the other matters raised by Abed in regard to that issue. Should a Lump Sum Costs Order Be Made? 1. We are not satisfied that a lump sum costs order should be made. Relevant principles applicable to the making of a lump sum cost order are summarised by Davies J in Stankovic v State of NSW (No 2) [2016] NSWSC 335 at [11]-[13]. There is insufficient evidence for the Appeal Panel to be satisfied that it can logically, fairly and reasonably assess a costs amount in a manner that is fair to the parties, and with sufficient confidence of arriving at an appropriate sum on the materials available. There is also insufficient evidence that Cosgrove is impecunious or would otherwise be unlikely to be able to pay the costs of assessment if the parties fail to reach an agreement on quantum of costs. Orders 1. The Appeal Panel makes the following orders: 1. An oral hearing is dispensed with under s 50 (2) of the Civil and Administrative Tribunal Act 2013 and the matter is determined on the papers. 2. The Appeal Panel orders that in matter AP17/26175 the appellant Alison May Cosgrove pay the costs of the respondent Maria Abed on a party/party basis, such costs to be 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). ********** 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: 30 May 2018