Craig & Davison v M2 Haus Pty Ltd (No 2)

[2023] NSWCATCD 46

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Craig & Davison v M2 Haus Pty Ltd (No 2) [2023] NSWCATCD 46

Hearing dates:

On the papers

Date of orders:

03 April 2023

Decision date:

03 April 2023

Jurisdiction:

Consumer and Commercial Division

Before:

K Ross, Senior Member

Decision:

(1) Pursuant to s 50 (2) of the Civil and Administrative Tribunal Act 2014, a hearing of the cost applications is dispensed with.

(2) M2 Haus Pty Ltd is to pay Nathan Craig and Danielle Davison the sum of $4159.22 on or before 30 April 2023.

(3) The Builder’s claim for costs is dismissed.

Catchwords:

COSTS: Where Rule 38 applies and party has been successful

Legislation Cited:

Civil and Administrative Tribunal Act 2013

Civil and Administrative Tribunal Rules

Cases Cited:

Thompson v Chapman [2016] NSWCATAP 6

Category:

Costs

Parties:

Nathan Craig & Danielle Davison
M2 Haus Pty Ltd

File Number(s):

HB 22/08387

Publication restriction:

unrestricted

REASONS FOR DECISION

Application

1. On 27 February 2023 the Tribunal made and published its decision in the substantive proceedings between the parties. The Tribunal noted that the applicant homeowners had been successful in their claim and said that, absent any offer more generous than that made by the Builder on 11 July 2022, the applicant homeowners would appear to be entitled to a cost order. The Tribunal invited the homeowners to make an application for costs and gave the Builder the right to respond.

2. Both parties have now sought a costs order. Neither has provided any evidence of any other relevant offer of settlement.

3. For the reasons set out below I have determined that the Builder should pay the applicant homeowners’ costs in an amount of $4159.22.

Should a hearing be dispensed with?

4. The applicant homeowners submit that a hearing of the cost application is not required. I am satisfied that it is in the interest of the Tribunal’s guiding principle for a hearing of the cost application to be dispensed with. Both parties have made written submissions which allow me to consider the applications without requiring oral argument. A hearing of the cost applications would add to delay and increase the costs of these proceedings.

5. I accordingly make an order pursuant to s 50 (2) of the Civil and Administrative Tribunal Act 2013 (“the NCAT Act”), dispensing with a hearing.

The law

6. The matter of costs is governed by s 60 of the NCAT Act and Rule 38 of the Civil and Administrative Tribunal Rules (“the NCAT Rules”) which provide as follows:

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.

(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.

38 Costs in Consumer and Commercial Division of the Tribunal

(1) 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.

7. The effect of these provisions is that, unless Rule 38 applies or there are special circumstances, each party to the proceedings should pay its own costs. If Rule 38 applies, the Tribunal can award costs in the absence of special circumstances. The Tribunal has discretion as to whether to make an award of costs but must act judicially. Costs are awarded not to punish an unsuccessful party but to compensate a successful party.

8. In Thompson v Chapman [2016] NSWCATAP 6, the Appeal Panel discussed the exercise of the discretion, stating at [69[ to [72]:

69. 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.

70. 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.

71. 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 Gummo JJ at 88 and Kirby J at 121 – 123.

72. 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.

Does Rule 38 apply?

9. In this matter the homeowners sought compensation from the Builder in an amount which exceeded $30,000.

10. On this basis I am satisfied that Rule 38 applies.

The Builder’s claim for costs

11. The Builder does not say why it should be entitled to a cost order. It was not the successful party in these proceedings. Whilst it made an offer of settlement on 11 July 2022, the Homeowners achieved a result in the proceedings which was better than that contained in the offer.

12. There is no basis for an order that the Homeowners pay the Builder’s costs.

The Homeowners’ application for costs

13. The Homeowners were successful in their claim. There is nothing in the way they conducted the proceedings which would take away from their right to have a costs order in their favour. Cost orders are made to compensate a party, where a party has been put to the cost of bringing or defending a claim.

14. The costs which the applicants claim include the costs of an inspection and report, and expenses incurred for the expert to provide a compliant report, prepare the Scott Schedule and attend the hearing. I allow these amounts claimed.

15. The applicants also claim reimbursement of the NCAT filing fee. I allow this claim.

16. Parties are however responsible to pay their own costs to prepare for and attend the hearing. I disallow the claim for accommodation on this basis.

Orders

1. Pursuant to s 50 (2) of the Civil and Administrative Tribunal Act 2014, a hearing of the cost applications is dispensed with.

2. M2 Haus Pty Ltd is to pay Nathan Craig and Danielle Davison the sum of $4159.22 on or before 30 April 2023.

3. The Builder’s claim for costs is dismissed.

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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: 17 July 2023