Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Cubic Metre Pty Ltd v C & E Critharis Constructions Pty Ltd [2019] NSWCATAP 191 Hearing dates: On the papers Date of orders: 30 July 2019 Decision date: 30 July 2019 Jurisdiction: Appeal Panel Before: N Hennessy ADCJ, Deputy President K Ransome, Senior Member Decision: 1. The appellant's application for costs is refused. 2. The respondent's application for costs is refused. Catchwords: APPEAL – costs of appeal – where Tribunal ordered that each party pay their own costs following withdrawal of application by builder - where sub-contractor appealed from first instance costs decision – where sub-contractor successful on appeal – where Appeal Panel re-exercised costs discretion but made no order as to costs – whether special circumstances exist justifying a costs order in favour of either party in the appeal proceedings Legislation Cited: Civil and Administrative Tribunal Act 2013 Civil and Administrative Tribunal Rules 2014 Cases Cited: Cubic Metre Pty Ltd v C & E Critharis Constructions Pty Ltd [2019] NSWCATAP 130 (28 May 2019) CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 Category: Costs Parties: Cubic Metre Pty Ltd (Appellant) C & E Critharis Constructions Pty Ltd (Respondent) Representation: Just Dispute Resolution (Appellant) Konstan Lawyers (Respondent) File Number(s): AP 18/42918 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 29 August 2018 Before: G Meadows, Senior Member File Number(s): HB 17/ 50093 reasons for decision Overview 1. A sub-contractor, Cubic Metre Pty Ltd, successfully appealed from the Tribunal's decision that each party pay its own costs after the builder, C & E Critharis Construction Pty Ltd, withdrew its application: Cubic Metre Pty Ltd v C & E Critharis Constructions Pty Ltd [2019] NSWCATAP 130 (28 May 2019). The Appeal Panel upheld the appeal because the Tribunal had not applied the correct legal principles. After applying what we considered the correct principles, we came to the same decision – that there should be no order as to costs at first instance. The sub-contractor and the builder have both applied to the Appeal Panel for their costs on appeal. We have decided that there are no special circumstances warranting an award of costs in favour of either party. 2. The builder originally brought proceedings against the sub-contractor in the Consumer and Commercial Division of the Tribunal seeking damages in excess of $87,000. The proceedings related to supplying and constructing a sandstone retaining wall. The builder withdrew the application after the second directions hearing. 3. Both parties agreed to their costs application being determined without a hearing. We are satisfied that the issues can be adequately determined in the absence of the parties by considering their written submissions: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) s 50(2) NCAT Act. Costs rule 1. The applicable costs rule is that each party is to pay their own costs unless the Tribunal is satisfied that there are special circumstances warranting an award of costs: NCAT Act, s 60. 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. 1. The rule in s 60 of the NCAT Act applies because when deciding whether to award costs in relation to an internal appeal, the Appeal Panel must apply the first instance costs provisions: Civil and Administrative Tribunal Rules 2014 (NCAT Rules), Rule 38A(2). The first instance costs provision is that if the amount claimed or in dispute is $10,000 or less, s 60 of the NCAT Act applies: NCAT Act, s 60 read with NCAT Rules, Rules 38 and 38A. The amount claimed or in dispute is $10,000 or less. (See Appeal Book page 170 where the sub-contractor sought an order, in the alternative, for lump sum costs of $10,000 and an email of 10 September 2018 from the sub-contractor offering to compromise the first instance costs for $7,000.) 2. Even if the amount claimed or in dispute is more than $10,000 and less than $30,000, s 60 of the NCAT Act applies because the Tribunal has not made an order under clause 10(2) of Schedule 4 to the NCAT Act: NCAT Rules, Rule 38(2)(a). Are there "special circumstances" warranting an award of costs in favour of either party? 1. The sub-contractor submitted that we should take into account the outcome of the appeal because that is a relevant matter: NCAT Act, s 60(3)(g). According to the sub-contractor, the outcome was that not only was it successful, but it met the "high bar for successful appeals in respect of discretionary decisions" set out in House v The King [1936] HCA 40; 55 CLR 499. The sub-contractor submitted that the fact that the Appeal Panel was satisfied that the costs discretion had miscarried is "special" or "out of the ordinary": CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [32]. 2. In addition, the builder's conduct in contesting what the sub-contractor referred to as "compelling grounds of appeal" lengthened the time of the appeal and increased costs. We assume that the sub-contractor is relying on s 60(3)(b) of the NCAT Act – "whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings". 3. In summary, the sub-contractor submitted that, noting the outcome of the appeal, the grounds on which the appeal was successful and the general principle that costs following the event, the Appeal Panel should order the builder to pay 80% of the sub-contractor's costs of the appeal. There should be no costs in relation to the Appeal Panel's decision to re-hear the costs application. 4. Contrary to the sub-contractor's submission, the general principle that costs follow the event, is not relevant. The outcome of the appeal is only relevant if the relative strengths of the claims warrant a costs order being made: NCAT Act, s 60(3)(c). This is not a case where the appeal was so obviously meritorious that the builder should have agreed that the matter be remitted to the Tribunal at first instance for determination according to law. It follows that neither the strength of the grounds of appeal, nor the time taken to deal with the appeal, warrants a costs order in favour of the sub-contractor. 5. The builder's case was that the appeal was unlikely to succeed and the proceedings were disproportionate to the claim in the substantive proceedings. We assume the builder is relying on s 60(3)(c) of the NCAT Act when submitting that the appeal was unlikely to succeed. The difficulty with this submission is that the Appeal Panel upheld the appeal. While we made the same order as the Tribunal made at first instance, we re-exercised the costs discretion based on our understanding of the correct legal principles. 6. According to the builder, because the Tribunal proceedings comprised only two directions hearings before the claim was withdrawn, the sub-contractor should pay the costs of a "totally disproportionate" appeal. At first instance, the builder proposed that the proceedings be transferred to the Local Court, but the sub-contractor did not consent. Given those circumstances, and the relatively low level of costs incurred, the sub-contractor "acted in a disproportionate manner in pursuing an appeal that was unlikely to succeed in changing the result." We assume that these circumstances are said to amount to "any other matter that the Tribunal considers relevant": NCAT Act, s 60(3)(g). 7. In our view, even if the result was the same, the sub-contractor was successful on appeal. In this case, appealing from a decision where the amount in dispute is relatively small does not warrant a costs order against the successful appellant. 8. None of the matters relied on by either party satisfy us that there are special circumstances warranting an award of costs. Orders 1. The appellant's application for costs is refused. 2. The respondent's application for costs is refused. ********** 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: 30 July 2019