Citywide Developments Pty Ltd v Dawn Piebenga;; Dawn Piebenga v Citywide Developments Pty Ltd

[2015] NSWCATCD 76

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Citywide Developments Pty Ltd v Dawn Piebenga;; Dawn Piebenga v Citywide Developments Pty Ltd [2015] NSWCATCD 76
Hearing dates:	On the papers
Decision date:	30 June 2015
Jurisdiction:	Consumer and Commercial Division
Before:	G Meadows, Senior Member
Decision:	1   In matter number HB 14/41322 each party is to pay their own costs. 2   In matter number HB 14/27779 the respondent is to pay 50% of the applicant’s costs of the proceedings on the ordinary basis as agreed or assessed.
Catchwords:	Administrative Law—legal costs—whether “special circumstances” exist—discretionary decision pursuant to Rule 38 of the Civil and Administrative Tribunal Rules 2014
Legislation Cited:	Civil and Administrative Tribunal Act 2013
Category:	Costs
Parties:	Citywide Developments Pty Ltd (applicant/cross respondent) Dawn Piebenga (respondent/cross applicant)
Representation:	Solicitors: Peter Merity Solicitor Pty Limited Fontgalland Lawyers
File Number(s):	HB 14/27779;HB 14/41332
Publication restriction:	Nil

Reasons for decision

Background

1. Citywide Developments Pty Ltd (the Builder) filed claim number HB 14/27779 seeking, originally, an amount of $82,578.23 plus interest in relation to alleged outstanding payments. Dawn Piebenga (the Owner) filed application HB 14/41322 seeking originally an order that she has a liability to pay an amount of approximately $18,000.00.

2. On 08 April 2015 I published my reserved decision with reasons in relation to both claims. The orders were that in relation to HB 14/27779 the Owner was to pay the Builder the sum of $48,602.44 and HB 14/41322 was dismissed. However, it is important to note that those orders were made in that form for the sake of clarity and convenience: in fact I found in relation to the Owner’s claim that she was entitled to the amount of $1,000.00 for rectification of defective works, and the amount of $1,400.00 in liquidated damages pursuant to the contract. To avoid double handling, those sums were set off against the finding that the Owner owed the Builder the sum of $51,002.44.

3. At the end of my written reasons a timetable was made for the parties to provide written submissions in relation to any application for costs. Both parties have provided such submissions in relation to an application by the Builder for its costs in both proceedings.

Legislation

4. There is no dispute between the parties that the relevant legislation is section 60 of the Civil and Administrative Tribunal Act 2013 (CAT Act) and Rule 38 of the Civil and Administrative Tribunal Rules 2014 (CAT Rules and Rule 38).

5. There is also no dispute that those sections provide that the starting point for any consideration of costs in Tribunal proceedings is that both parties pay their own costs, that the Tribunal may award costs in relation to proceedings if it is satisfied that there are special circumstances warranting an award of costs (with a number of matters which may be taken into account set forth in s60(3)of the CAT Act) and that in relation to matters within the Consumer and Commercial Division of the Tribunal (CCD) Rule 38 provides that the Tribunal has a discretion to award costs in the CCD even in the absence of special circumstances, depending on the amount claimed. There is no need to set out those provisions.

Builder’s Submissions

6. The Builder submits first that there are special circumstances on the basis that the Owner unreasonably prolonged the proceedings by reason of failing to comply with orders of the Tribunal on specified occasions and that the Owner’s defects claim had no tenable basis.

7. The Builder next submits that Rule 38 should operate in this case pursuant to the principle in Oshack v Richmond River Council [1998] HCA 11 at 67 that costs should “follow the event”.

8. The Builder submits that the Builder succeeded in its claim (as set out above) whereas the Owner was “wholly unsuccessful” in her claim.

Owner’s Submissions

9. The Owner’s submissions are lengthy and detailed.

10. The Owner submits that special circumstances do not exist in these cases:

1. The Owner did not unreasonably prolong proceedings. The Owner provides detailed submissions explaining any alleged delays; and

2. It is not the case that the Owner’s application had no tenable basis as in fact the Owner did succeed in an award (as I have explained in paragraph 2 above).

3. Even if “special circumstances” do exist, it does not follow that a costs order should be made.

11. In relation to Rule 38, the Owner submits:

1. Even if the Builder was successful, the power in Rule 38 is discretionary;

2. The principle is Oshlack is subject to exceptions, such as misconduct on the part of the successful party which might disentitle that party to the “usual” costs order.

12. The Owner then provides very detailed submissions in support of the allegations that there was misconduct on the part of the Builder both prior to litigation and once litigation had commenced. These submissions include that the Builder in effect invited the litigation by refusing to engage in discussions, by unnecessarily prolonging the proceedings (by not properly formulating its claim prior to commencing proceedings) and by succeeding on a point “not argued before a lower court”.

13. The last point above appears to relate to a submission that while the Builder succeeded in part on its argument in relation to estoppel, that point was not raised in the hearing and was raised only for the first time in written submissions after the cases had concluded. The Owner also submits that the Builder did not establish the elements required for an estoppel argument.

14. The Owner also claims that the Builder obtained relief which the Owner had already offered in settlement of the dispute. The Owner is referring here to three separate settlement offers:

1. On 20 November 2014 - $25,000.00;

2. On 28 November 2014 - $31,008.20 (a “Calderbank offer”); and

3. On 01 December 2014 - $50,000 (immediately prior to the hearing which took place on that date).

Consideration and Determination

15. First, in relation to the Owner’s claim, being HB 14/41322, I find that that claim was for an amount between $10,000.00 and $30,000.00 for the purposes of Rule 38. I do not accept the Builder’s submission that the owner did not have a tenable claim and indeed as explained above the Owner did recover the amount of $2,400.00.

16. No order was made by the Tribunal pursuant to Clause 10(2) of Schedule 4 to the CAT Act. In those circumstances, in my opinion it is not appropriate to make a discretionary order for costs in favour of either party.

17. In relation to the Builder’s claim, it is clear that Rule 38(2)(b) is engaged, permitting a discretionary order for costs even in the absence of “special circumstances” as the claim was for an amount in excess of $30,000.00 (even allowing for the downward revision of the claim).

18. I am not satisfied, or rather persuaded, by the submissions of either party in relation to allegations of “misconduct” or “unreasonably prolonging the proceedings” in this matter. It is clear that while directions were not always complied with and also that the Builder’s claim was amended (that is, the amount claimed was amended), this does not amount to “unreasonably prolonging” the proceedings, noting that they were commenced on 21 May 2014 and August 2014 (the date is obscured on the application form) respectively and were heard before the end of 2014

19. The Builder was partly successful in its claim for outstanding payments although its case in relation to claims under the contract was largely dismissed.

20. In my view it is appropriate to exercise my discretion pursuant to s 60 of the CAT Act and Rule 38 to order that the Owner is to pay the Builder 50% of the Builder’s costs in matter number HB 14/27779 on the ordinary basis as agreed or assessed.

Geoffrey Meadows

Senior Member

Civil and Administrative Tribunal of NSW

30 June 2015

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

Decision last updated: 28 August 2015