Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Wilson v Dash (No.2) [2018] NSWCATAP 155 Hearing dates: Decided on the papers Date of orders: 27 June 2018 Decision date: 27 June 2018 Jurisdiction: Appeal Panel Before: P Callaghan SC, Principal Member D Goldstein, Senior Member Decision: 1. A hearing in respect of this costs application is dispensed with under section 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW). 2. The appellants must pay the respondent's costs of the appeal such costs if not agreed to be assessed on a party/party basis pursuant to the provisions of the Legal Profession Uniform Law Application Act 2014. Catchwords: Costs - gross sum cost order Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 Home Building Act 1989 (NSW) Legal Profession Uniform Law Application Act 2014 (NSW) Cases Cited: 203 Castlereagh Street Pty Limited v Skybloo Holdings Pty Limited [2017] NSWCATAP 29 LMA Contractors Limited v Changizi [2017] NSWCATAP 145 Thompson v Chapman [2016] NSWCATAP 6 Category: Costs Parties: Murray Wilson and Katherine Hale (Appellants) Jason Dash (Respondent) Representation: Solicitors: Atkinson Vinden (Appellants) File Number(s): AP 17/04745 Publication restriction: Nil Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Decision Citation: Nil Date of Decision: 23 December 2016 Before: C Paull, Senior Member File Number(s): HB 15/34814 and HB 15/59593 reasons for decision 1. In these proceedings on 19 April 2018 ([2018] NSWCATAP 91) we dismissed the appeal and made orders in the event that either party desired to make an application for costs. Those orders included the following: '(5) Subject to the right of the parties to make submissions under section 50(3) of the Civil and Administrative Tribunal Act (which should be made in conjunction with the submissions referred to above), the Appeal Panel will determine any costs application on the basis of the papers lodged in the Appeal Division of the Tribunal.' 1. On 10 May 2018 the respondent (now representing himself) applied for a costs order in his favour in the sum of $20,234.68. He supported this application by attaching a barrister's tax invoice, an extract from his bank Statement of Account and a copy of his solicitor's trust account ledger all of which evidence the legal fees that he claims as the costs of the appeal. 2. On 31 May 2018 the appellants responded stating that the appropriate costs order was for them to pay the respondent's reasonable costs of the appeal on a party and party basis, as agreed or assessed. Costs jurisdiction 1. Section 60 of the Civil and Administrative Tribunal Act 2013 (NSW) (the 'Act') states that: '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 38A of the Civil and Administrative Tribunal Rules 2014 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. Part 4 of the Act deals with Practice and Procedure. Section 60 of the Act is in Part 4. Section 35 of the Act which is also in Part 4, states: 'Each of the provisions of this Part is subject to enabling legislation and the procedural rules.' 1. The effect of Section 35 of the Act makes it clear, in our view that section 60 of the Act is subject to Rule 38A. 2. The appeal in these proceedings was lodged on 31 January 2017. The procedural rule which applied to the proceedings at first instance was Rule 38 of the Civil and Administrative Tribunal Rules 2014 which states: '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 proceedings at first instance were brought under the Home Building Act 1989 (NSW). Pursuant to section 3 of Schedule 4 of the Act, proceedings under the Home Building Act are allocated to the Commercial and Consumer Division of the Tribunal. The amount claimed by the appellants in the proceedings at first instance was $100,000.00. The proceedings at first instance also dealt with the respondent's claim against the appellants in the sum of $142,685.00. 2. By reason of the matters stated in the preceding paragraph, Rule 38 applied to the proceedings at first instance. The provisions of Rule 38 are different to the content of section 60 of the Act. By reason of this fact pursuant to Rule 38A(2) we must apply Rule 38 when deciding whether to award costs in relation to this Appeal. 3. In proceeding under Rule 38 we will take into account what was said by the Appeal Panel in Thompson v Chapman [2016] NSWCATAP 6. At [66 – 70] of that decision the Appeal Panel stated: `Each of Regulation 20 of the CTTT Regulation and Rule 38 provide a general discretion in respect to the award of costs. 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] 170 CLR 534 per Mason CJ at 554 and Oshlack v Richmond River Council per McHugh J at 97. 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 is by way of an indemnity to the successful party and not as punishment of the unsuccessful 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. 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. 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.' 1. At paragraph 76 The Appeal Panel stated in conclusion: '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.' Gross sum costs order 1. The respondent has in effect applied for a 'gross sum costs' order since he has applied for an order that he recover as his costs all of the money he has paid to his lawyers in connection with his appeal. 2. Section 60(4)(a) of the Act provides that: (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 1. The Consumer and Commercial Division Guideline on Costs states at 12(c): If the Tribunal decides to make a costs order, the amount of costs will be determined in one of the following ways: a) b) c) By the Tribunal fixing an amount to be paid or specifying how costs are to be otherwise fixed 1. By reason of section 60(4)(a) of the Act and as indicated by the Consumer and Commercial Division Guideline on Costs, we have the jurisdiction to fix the amount to be paid by the appellants to the respondent as the costs of the appeal. 2. In 203 Castlereagh Street Pty Limited v Skybloo Holdings Pty Limited [2017] NSWCATAP 29 an Appeal Panel stated at [39] – [41] in connection with fixing costs : 'The principles concerning when a Court might make a gross sum costs order are set out in a number of recent Court of Appeal decisions, including: Hamod v State of New South Wales [2011] NSWCA 375 at [813]ff; eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd (No 2) [2015] NSWCA 422 at [8]ff and [30]; and Kostov v Zhang (No 2) [2016] NSWCA 279 at [19]ff. These principles, relevantly adapted to the circumstances of the Tribunal include: A fixed sum costs order involves a departure from the usual process by which costs are assessed in accordance with the statutory procedures now relevantly found in the Legal Profession Uniform Law Application Act 2014 (NSW) (especially Pt 7 dealing with "ordered costs") and the Legal Profession Uniform Law (NSW), eInduct Systems at [8]; A fixed sum costs order may be appropriate where: the sum of costs in question is relatively modest, eInduct Systems at [30]; a party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment, Hamod at [813], [816] and [817], eInduct Systems at [30]; the assessment of costs would be protracted and expensive, Hamod at [813] and [817]; and/or the case was complex, Hamod at [815]-[817]; Sections 36(1) and (4) of the NCAT Act (which can be seen as equivalent to those in ss 56(1), 57(1)(d) and 60 of the CP Act) suggest that the following factors merit particular consideration: the relative responsibility of the parties for the costs incurred; the degree of any disproportion between the issue litigated and the costs claimed; the complexity of the proceedings in relation to their cost; and the capacity of the unsuccessful party to satisfy any costs liabiltity, Hamod at [816], Kostov at [22]. An order for fixed sum costs should be based on an informed assessment of the actual costs, having regard to the information before the Tribunal. Furthermore, the approach taken to estimate the costs must be logical, fair and reasonable. This may involve an impressionistic discount of the costs actually incurred in order to take into account the contingencies that would be relevant in any formal costs assessment, Hamod at [820]; The power to make a fixed sum costs order should only be exercised when the Tribunal considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available, Hamod at [813], Kostov at [23]; Examples of the type of material that should be available if a fixed sum costs order is to be made can be found in the decisions in Colquhoun v District Court of New South Wales (No 2) [2015] NSWCA 54 at [7] and SAB Closed 1 Pty Ltd v Bees & Honey Pty Ltd; Bees & Honey Pty Ltd v SAB Closed 1 Pty Ltd [2015] NSWSC 1162 at [10]. The types of supporting material usually required include: the timing and nature of costs incurred, including details of the work done, the hours worked, the hourly rates actually charged and, in the case of counsel's fees, similar details concerning the work done by counsel; the rates at which counsel, other lawyers and other professional advocates, if relevant, charge; and the amount likely to be recoverable on assessment in the event that that took place, which may be established by "objective arm's length evidence from a costs assessor" (to use the language of Stevenson J in SAB Closed 1 at [10].' 1. As we have stated, the respondent has supplied documents which form the basis of his claim for costs. These documents indicate that he is claiming for the total amount of costs that he paid to his legal representatives in connection with the appeal. 2. Having regard to what was stated in 203 Castlereagh Street Pty Limited v Skybloo Holdings Pty Limited, there is a paucity of detail with the supporting documentation which the respondent has supplied. In particular, perhaps apart from counsel's tax invoice dated 14 February 2017, there is no material which establishes: 1. the timing and nature of the costs incurred; 2. details of the work done; 3. the hours worked; 4. the hourly rates actually charged; 5. in the case of counsel's fees, similar details concerning the work done by counsel; 6. the rates other lawyers and other professional advocates, if relevant, charge; and 7. the amount likely to be recoverable on assessment in the event that that took place, which may be established by "objective arm's length evidence from a costs assessor". 1. Due to this lack of the relevant information, we are unable to make a fixed costs order fairly between the parties, with sufficient confidence in arriving at an appropriate sum on the materials available. 2. However we are of the view that as the successful party the respondent should be awarded his costs of the appeal on a party/party basis. As stated at the commencement of these reasons, the appellants are of a similar view and have sought an order in those terms. 3. No party has submitted that this costs application could not be adequately dealt with on the papers and we are satisfied that it can be adequately determined on the papers and without a hearing. Accordingly, an order will be made under section 50(2) of the Act dispensing with a hearing. 4. Finally, we have more recently been provided with 'Without Prejudice Save as to Costs' correspondence between the parties dated 4 and 6 June 2018 whereby offers are exchanged by the parties to resolve the costs of the first instance proceedings and the Appeal proceedings. In LMA Contractors Limited v Changizi [2017] NSWCATAP 145 an appeal panel found at [19] that section 81 of the Act: 'does not allow us to make a costs determination in relation to the proceedings before the Tribunal Member at first instance, in circumstances where there was no application for an order for the costs of those proceedings. The Tribunal at first instance was not able to consider the question of costs if there was no application and therefore we as the Appeal Panel are not able to do so either.' 1. In the decision under appeal no relevant costs order was made and none was the subject of the appeal. It is apparent from the 'Without Prejudice Save as to Costs' correspondence between the parties dated 4 and 6 June 2018, that there was agitation of the issue of the costs of the proceedings under appeal at a directions hearing in the Consumer and Commercial Division of this Tribunal on 1 June 2018. That is not an issue which we may consider. 2. Since the 'Without Prejudice Save as to Costs' correspondence indicates that the parties offers regarding costs take into account both the first instance costs and the appeal costs, we find that there is no utility in considering the offers for the purposes of determining the respondent's costs application in this appeal. Orders 1. A hearing in respect of this costs application is dispensed with under section 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW). 2. The appellants must pay the respondent's costs of the appeal such costs if not agreed to be assessed on a party/party basis pursuant to the provisions of the Legal Profession Uniform Law Application Act 2014 (NSW). ********** 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: 27 June 2018