Civil and Administrative Tribunal New South Wales Medium Neutral Citation: News v Cotes [2019] NSWCATAP 186 Hearing dates: 5 July 2019 Date of orders: 22 July 2019 Decision date: 22 July 2019 Jurisdiction: Appeal Panel Before: M Harrowell, Principal Member K Rosser, Principal Member Decision: 1. Leave to appeal is refused and the appeal is dismissed 2. Subject to order 3, the appellant is to pay the respondents' costs of this appeal, such costs to be as agreed or assessed on an ordinary basis. 3. In the event either party contends a different costs order should be made, the following order and directions are made: a) Within 7 days from the date of the publication of these orders, the applicant for costs (costs applicant) is to file and serve any evidence and submissions in support of the application (costs application), whereupon order 2 ceases to have effect. b) Within 14 days from the date of publication of these orders the respondent to the costs application is to file and serve any submissions in response. c) Within 21 days from the date of publication of these orders the costs applicant is to file any submissions in reply. d) The parties' submissions are to include submissions about whether an order should be made dispensing with a hearing of the costs application pursuant to s 50(2) of the Civil and Administrative Tribunal Act, 2013. Catchwords: COSTS – Rule 38 of the Civil and Administrative Tribunal Rules, 2014 – exercise of discretion – usual order – successful party's entitlement to costs – no error in exercising discretion Legislation Cited: Civil and Administrative Tribunal Act, 2013 (NSW) Civil and Administrative Tribunal Rules, 2014 (NSW) Cases Cited: Bonita v Shen [2016] NSWCATAP 159 News v Cotes and Laptev [2019] NSWSCATAP 110 Thompson v Chapman [2016] NSWCATAP 6 Texts Cited: Nil Category: Principal judgment Parties: Rosemary News (Appellant) Jane Maxine Cotes (First Respondent) Constantine Laptev (Second Respondent) Representation: R News (Appellant in-person) V Thomas (Respondent) Solicitors: Australia Business Lawyers and Advisors (Respondent) File Number(s): AP 19/22269 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal of New South Wales Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 10 April 2019 Before: D Bluth, Senior Member File Number(s): COM 17/27172, COM 17/16467, COM 17/16463 reasons for decision Introduction 1. This is an appeal concerns a costs decision made by the Tribunal in relation to a dispute about a retail lease. 2. The history can be stated briefly. 3. The Tribunal had previously determined three applications. Two applications had been brought by the appellant (who was the tenant) and one which was bought by the respondents (who were the landlords). 4. The appellant's applications were COM 17/16467 and COM 17/16463 (tenant's applications). In those proceedings the appellant sought various orders including a claim for damages in excess of $180,000. 5. The respondents' application was COM 17/27172 (landlords' application). In that application the respondents claims included unpaid rent and interest and an order for possession. 6. By orders made 26 October 2018 the tenant's applications were dismissed. In respect of the landlords' application, the Tribunal made an order that the appellant pay the respondents the sum of $17,079.30 for unpaid rent and interest. 7. The respondents made an application for costs in relation to the tenant's applications. No application for costs was made in respect of the landlords' application. 8. On 10 April 2019 the Tribunal made a lump sum cost award in the sum of $100,000 in favour of the respondents against the appellant in respect of the tenant's application (costs decision). The Tribunal published written reasons for decision (Reasons). 9. The appellant appeals the costs decision. She filed a Notice of Appeal on 9 May 2019. The appeal was filed in time. 10. The appeal was heard on 5 July 2019, the parties having filed relevant evidence and submissions as directed by the Tribunal. At the hearing the parties made oral submissions. Notice of Appeal 1. The appellant seeks to set aside the cost decision and asks the Appeal Panel to make an order that each party pays their own costs. 2. In the Notice of Appeal, the appellant says the decision was not fair and equitable because: 1. There was no "special circumstances" to award costs. 2. Reasonable counter offers were provided to the other side. 3. The imbalance in the financial circumstances of each party was acknowledged. 4. She had stated from the outset that she did not intend to claim legal costs even when she was legally represented. 5. She had informed the other side and [the Tribunal] throughout the hearing that awarding any costs would result in her becoming a bankrupt. The other side was aware of this, and was seeking to punish her for complaining in the first place. 6. Subject to the findings of the Appeal Panel in this case, there are further considerations to be taken into account. 1. The reference to "findings of the Appeal Panel" is a reference to a decision of the Appeal Panel made on 30 April 2019 in which the appellant appealed the substantive orders dismissing her applications: see News v Cotes and Laptev [2019] NSWSCATAP 110. 2. The appellant provided a bundle of documents in support of her appeal together with written submissions. 3. The appellant raised a "point of law" in which she said the Tribunal did not give sufficient weight to early attempts to settle proceedings. These attempts were a request to meet to discuss issues including a compromise offer, the fact the letter of demand initially issued was "for a substantially less sum than requested later when the case went to the Tribunal" and the fact that the landlord refused to attend mediation. In this regard the appellant submitted that the respondents now have the benefit of various renovations and upgrade work which she carried out to the site which should be taken into account in determining whether a costs order should be made in favour of the respondents. 4. Secondly, the appellant stated that the Tribunal did not take into account all of the settlement offers that had been made. In this regard the appellant said she had made genuine offers to compromise the proceedings. The appellant said she was "unaware of the system of Calderbank offers", that the respondents had benefited from a new fit out and that the appellant had "lost her investment in the building, lost her asset and lost her business all of which the [respondents] has benefited". 5. In oral submissions, the appellant again said that the fact she had lost her investment and that the respondents had gained the benefit of improvements were matters to be taken into account in determining whether a costs order should be made. The appellant submitted that the Tribunal had not adequately taken into account the offers made by the parties. 6. In making these submissions, the appellant informed the Appeal Panel that she was not challenging the Tribunal's assessment and award of a lump sum amount of $100,000. Rather, the appellant said no order for costs should be made having regard to the above submissions. Consideration 1. It is clear from the parties' submissions that the amount claimed or in dispute in respect of the tenant's applications was more than $30,000. Consequently, r 38 of the Civil and Administrative Tribunal Rules, 2014 (NSW) (Rules) applies. This is despite s 60 of the Civil and Administrative Tribunal Act, 2013 (NSW) (NCAT Act), which otherwise provides that each party is to pay their own costs. 2. Because s 60 does not apply, a party claiming costs is not required to show special circumstances in order to enliven the Tribunal's jurisdiction to award costs. Rather, there is a general discretion to award costs even in the absence of special circumstances: eg Bonita v Shen [2016] NSWCATAP 159 at [38]. 3. As explained in Bonita and cases such as Thompson v Chapman [2016] NSWCATAP 6, the following principles are relevant: 1. the starting point is that the usual order for costs should be made in that only a successful party should be entitled to an order for costs in their favour; 2. the award is to indemnify the successful party for the costs incurred in connection with the proceedings; 3. there is no absolute rule that a successful party should recover their costs, and a departure from the usual order is permissible, for example having regard to offers of compromise which had been made. 1. For the Appeal Panel to intervene, it is necessary for appellant to demonstrate that the discretion to award costs miscarried because of some relevant error. 2. The appellant contends that her improvements to the property during the course of the lease were relevant facts to be considered in the exercise of a discretion to award costs. We do not agree. A costs order is to compensate a party for costs incurred in the proceedings. The existence of any property rights and the ownership of any property in consequence of the resolution of a dispute is not a relevant factor to be taken into account in the award of costs, other than in the context of determining which party was successful and on what issues. In the present case, the appellant was wholly unsuccessful in her applications. 3. In relation to the offers of compromise, the Tribunal did not make a special order for costs. The amount awarded by the Tribunal was less than the full amount claimed. The award was not a complete indemnity for all costs. The appellant did not challenge the amount awarded other than on the basis that no costs order should be made in favour of either party. 4. The appellant did not refer us to any offer which would support a conclusion that the usual order for costs should not be made in favour of the successful party, in this case the respondents. This view is consistent with what the Tribunal said in the Reasons at [30]. 5. In these circumstances, no relevant error of fact or law has been demonstrated, leave to appeal should be refused and the appeal should be dismissed. Costs of the appeal 1. Rule 38A provides that r 38 applies in determining costs in this appeal. The respondents sought both dismissal of the appeal and their costs of the appeal. 2. The amount claimed or in dispute in this appeal is the amount of the costs award, namely $100,000. This is more than $30,000 being the amount prescribed in r 38. Consequently there is a general discretion to award costs consistent with the principles we have outlined above. 3. The respondents have been successful in this appeal. On the face of it, they are entitled to be awarded costs of the appeal. We will make an order to this effect with liberty for either party to apply should they contend for a different order. Orders 1. The Appeal Panel makes the following orders: 1. Leave to appeal is refused and the appeal is dismissed. 2. Subject to order 3, the appellant is to pay the respondents' costs of this appeal, such costs to be as agreed or assessed on an ordinary basis. 3. In the event either party contends a different costs order should be made, the following order and directions are made: 1. Within 7 days from the date of the publication of these orders, the applicant for costs (costs applicant) is to file and serve any evidence and submissions in support of the application (costs application) whereupon order 2 ceases to have effect. 2. Within 14 days from the date of publication of these orders the respondent to the costs application is to file and serve any submissions in response. 3. Within 21 days from the date of publication of these orders the costs applicant is to file any submissions in reply. 4. The parties' submissions are to include submissions about whether an order should be made dispensing with a hearing of the costs application pursuant to s 50(2) of the Civil and Administrative Tribunal Act, 2013. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar 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: 22 July 2019