Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Syed Ahmad Shoaib Ali Pty Ltd v Jandson Pty Ltd; Jandson Pty Ltd v Syed Ahmad Shoaib Ali Pty Ltd [2018] NSWCATAP 304 Hearing dates: On the papers Date of orders: 19 December 2018 Decision date: 19 December 2018 Jurisdiction: Appeal Panel Before: S Westgarth, Deputy President G Curtin SC, Senior Member Decision: (1) Jandson Pty Ltd is to pay Syed Ahmad Shoaib Ali Pty Ltd and Syed Ahmad Shoaib Ali their costs at first instance on the ordinary basis until 9th December 2016 and on an indemnity basis thereafter in an amount agreed or as assessed; (2) Jandson Pty Ltd is to pay Syed Ahmad Shoaib Ali Pty Ltd and Syed Ahmad Shoaib Ali their costs incurred in both appeals on the ordinary basis as agreed or as assessed; and (3) In respect of the applications for costs orders a hearing is dispensed with Catchwords: Costs Legislation Cited: Civil and Administrative Tribunal Act 2013 Civil and Administrative Tribunal Rules 2014 Cases Cited: Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 LMA Contractors Limited v Changizi [2017] NSWCATAP 145 Treloar Constructions Pty Ltd v McMillan (No 2) [2017] NSWCA 146 Category: Costs Parties: Syed Ahmad Shoaib Ali Pty Ltd (appellant in AP 18/14573 and first respondent in AP 18/17165) Syed Ahmad Shoaib Ali (second respondent in AP 18/17165) Jandson Pty Ltd (respondent in AP 18/14573 and appellant in AP 18/17165) Representation: Counsel: A E Hopkins (Syed Ahmad Shoaib Ali Pty Ltd and Syed Ahmad Shoaib Ali) J Drummond (Jandson Pty Ltd) Solicitors: CCS Legal Pty Ltd (Syed Ahmad Shoaib Ali Pty Ltd) Michael Atkinson & Associates (Jandson Pty Ltd) File Number(s): AP 18/14573 and AP 18/17165 Publication restriction: Unrestricted Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 26 February 2018 Before: S Thode, Senior Member File Number(s): HB 16/51048 REASONS FOR DECISION Background 1. The decision at first instance made an order that the respondent homeowner was to pay to the applicant builder $17,930.56 and that each party should pay their own costs. 2. Both the homeowner and the builder appealed. 3. The homeowner was successful in having the order made against it set aside and, in its place, a finding that no sum of money was owing by the owner to the builder. The builder's appeal, if successful, could have resulted in a significant sum (in the order of $100,000.00) being payable by the homeowner (and guarantor) to the builder. However, the builder's appeal was not successful and was dismissed. 4. The Appeal Panel gave directions for the parties to make submissions with respect to costs of the appeal and costs at first instance. 5. As a result, the homeowner has filed submissions, the builder has filed its submissions and the homeowner has filed submissions in reply. The parties consented to this decision being made "on the papers" and that a hearing be dispensed with under s 55(2) of the Civil and Administrative Tribunal Act 2013 (NCAT Act). 6. The homeowner's submissions (inclusive of the Reply submissions) may be summarised as follows: 1. The homeowner and guarantor seek an order that the builder should pay their costs at first instance on an ordinary basis to 9 December 2016 and on an indemnity basis thereafter; 2. The builder is to pay the costs of the homeowner in the homeowner's appeal on an ordinary basis; and 3. The builder is to pay the costs of the homeowner and guarantor in the builder's appeal on an ordinary basis. 1. The builder submits: 1. The Tribunal cannot order costs at first instance because the homeowner and guarantor did not appeal the first instance costs order: 2. In respect of the homeowner's appeal special circumstances are required before costs can be ordered. There are none and there should not be any costs order; and 3. That it concedes that an appropriate order in the builder's appeal would be for the builder to pay the homeowner's (and the guarantor's) costs on an ordinary basis as agreed or assessed. Costs at first instance 1. The proceedings at first instance concerned an application brought by the builder claiming damages in the sum of $17,930.56 and a further sum of $85,104.00 for lost profit. The Tribunal considered whether a costs order should be made and decided that as each side had a measure of success each party should bear their own costs. 2. Although the homeowner's appeal did not appeal against the costs order, it submitted that now that the decision has been set aside, it may seek an order for its costs at first instance to be paid. In the Notice of appeal the owner sought an order that its costs be paid without making it explicit whether that claim included costs at first instance. In our view it is reasonably clear that the owner intended to claim costs at first instance in the event that its appeal was successful. 3. The letter (dated 9 December 2016) making a settlement offer was made with sufficient clarity to justify an order that costs of the owner at first instance on an indemnity basis be paid by the builder. 4. The principles as to when indemnity costs will be ordered following the rejection of a Calderbank offer were summarised by the Court of Appeal in Treloar Constructions Pty Ltd v McMillan (No 2) [2017] NSWCA 146. The Court stated, at [9], that the rejection of an offer may cause the court to make an order for indemnity costs if satisfied that the offer was a "genuine offer of compromise" and that the rejection of the offer was unreasonable. 5. The circumstances of the case, the factual and legal issues contested and the contents of the letter persuade us that that those two factors exist, and that we should exercise our discretion to order indemnity costs from that date onwards. 6. LMA Contractors Limited v Changizi [2017] NSWCATAP 145 is distinguishable for the reasons submitted by the homeowner, namely that there at first instance costs were not considered whereas here, costs were considered. Rule 38 of the Civil and Administrative Tribunal Rules 2014 (the Rules) permits costs to be awarded even in the absence of special circumstances. Homeowners' Appeal 1. The homeowner has been successful in its appeal. However, the subject matter of the claim was in the order of $17,000.00. The builder submits that statements made in the appeal panel decision in Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 support the view that as the amount in dispute in the appeal is less than $30,000, r 38A of the Rules does not apply. We do not share that view. Rule 38A is clear in providing that if the costs regime at first instance differ from those in s 60 by reason of the procedural rules then the first instance regime applies. Here at first instance r 38 applied and therefore r 38A has effect in the appeal. The statements relied upon by the builder in Allen v Tricare misinterpret that decision. Par 68 of that decision makes the position clear. That case was concerned with deciding whether r 38 applied. The amount claimed or in dispute at first instance did not change on appeal and the appeal panel did not address the circumstances applicable to this case (namely at first instance r 38 applied because of the amount claimed or in dispute, whereas in the owners appeal the amount in dispute was less than $30,000). Par 68 of the Tricare decision makes it clear that the appeal panel considered the amount in dispute at first instance which remained the same on appeal. 2. In our view, there should be an order that the homeowner's costs on the ordinary basis in respect of the homeowners' appeal be paid by the builder. Builder's Appeal 1. The homeowner and guarantor claim that the builder should pay their costs of the appeal on the ordinary basis. The builder concedes this. In our view, the concession is appropriate. The amount claimed or in dispute was in excess of $30,000.00 and accordingly, r 38A applies of the Rules. Orders 1. The Appeal Panel makes the following orders: 1. Jandson Pty Ltd is to pay Syed Ahmad Shoaib Ali Pty Ltd and Syed Ahmad Shoaib Ali their costs at first instance on the ordinary basis until 9th December 2016 and on an indemnity basis thereafter in an amount agreed or as assessed; and 2. Jandson Pty Ltd is to pay Syed Ahmad Shoaib Ali Pty Ltd and Syed Ahmad Shoaib Ali their costs incurred in both appeals on the ordinary basis as agreed or as assessed; and 3. In respect of the applications for costs orders a hearing is dispensed with. ********** 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: 19 December 2018