Dodge v Hacienda Caravan Park Pty Ltd (No 2)

[2021] NSWCATEN 5

Civil and Administrative Tribunal

New South Wales

• Amendment notes

Medium Neutral Citation:

Dodge v Hacienda Caravan Park Pty Ltd (No 2) [2021] NSWCATEN 5

Hearing dates:

On the basis of written submissions dated 10,24 and 31 March 2021

Date of orders:

22 September 2021

Decision date:

22 September 2021

Jurisdiction:

Enforcement

Before:

The Hon F Marks, Principal Member

Decision:

(1) The respondent is to pay the costs of the applicant assessed in the manner set out hereunder in default of agreement.

(2) Such costs are to be assessed under the provisions of the legal costs legislation as defined in section 3 A of the Legal Profession Uniform Law Application Act 2014, but on the basis that the applicant shall be entitled to recover all of his legal costs other than those which are of an unreasonable amount or have been unreasonably incurred and any doubts which the assessor may have as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved in favour of the applicant

Catchwords:

COSTS - order made to refer proceedings to Supreme Court under section 73 (5) of the Civil and Administrative Tribunal Act – whether costs order should be made in referral proceedings – basis of assessment of costs order to reflect recovery of all amounts reasonably incurred.

Legislation Cited:

Civil and Administrative Tribunal Act 2013 ss 60,73,77

Legal Profession Uniform Law Application Act 2014 s 3A

Legal Profession Uniform Law (NSW)

Cases Cited:

Dodge v Hacienda Caravan Park Pty Ltd [2021] NSWCATEN 2

Lin v Chief Commissioner of State Revenue [2018] NSWCATAD 98

Westbury v The Owners – Strata Plan No 64061 [2021] NSWCATEN 3

EMI Records Ltd v Ian Wallace Ltd [1983] Ch 59

Bouras v Grandelis [2005] NSWCA 463

Category:

Costs

Parties:

David Dodge (Applicant)
Hacienda Caravan Park Pty Ltd (Respondent)

Representation:

Counsel:
P Batley (Applicant)

Solicitors:
Tenants Union of NSW Co-op (Applicant)
T Hickling (Agent) (Respondent)

File Number(s):

PC 20/47307

Publication restriction:

Nil

Reasons for decision

Background

1. In Dodge v Hacienda Caravan Park Pty Ltd [2021] NSWCATEN 2 I made orders under section 73 of the Civil and Administrative Tribunal Act (“the CAT Act”) referring to the Supreme Court of New South Wales for its consideration the matter of whether the respondent Hacienda Caravan Park Pty Limited trading as Tweed River Hacienda Holiday Park had committed contempt of the NSW Civil and Administrative Tribunal by reason of its failure to comply with certain Orders of this Tribunal made on 17 January 2018 in matter RC 17/33896 in favour of the applicant David Dodge. I reserved costs and granted liberty to apply, which has been exercised by the applicant. In seeking a costs order in his favour, the applicant submitted they should be assessed on an indemnity basis. These reasons deal with that application.

2. The parties provided written submissions and agreed to this application being determined without the necessity of conducting a hearing. In my opinion it is appropriate to proceed on this basis, particularly as each party has provided detailed submissions.

The statutory basis for awarding costs

3. The proceedings by which the above referral was made are proceedings in this Tribunal. Accordingly, entitlement to a costs order is governed by the provisions of section 60 of the CAT Act;

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.

4. Prima facie each party to these proceedings is to bear his or its own costs unless it can be demonstrated that there are “special circumstances” as envisaged by section 60. The burden of demonstrating this will fall on the applicant. In determining whether such circumstances exist this Tribunal “may” but is not necessarily bound to consider the matters referred to in subsection (3).

5. Some assistance in considering the principles which are relevant to the exercise of discretion to award costs generally, and under section 60 is provided by observations of Senior Member NS Isenberg RFD in Lin v Chief Commissioner of State Revenue [2018] NSWCATAD 98. At, [6] and following the Senior Member said

As can be seen from s 60(1), the ordinary rule is that each party to the proceedings is to pay their own costs . However, s 60(2) provides that if the Tribunal is satisfied that there are “special circumstances warranting an award of costs ”, then in accordance with s 60(4) the Tribunal may determine by whom and to what extent costs are to be paid, including whether costs are to be assessed and if so the basis for the assessment. Section 60(5) sets out, on an inclusive basis, the meaning of the word “ costs ” for the purpose of s 60.

Relevantly, in Ceepee Pty Ltd v Roads and Maritime Services [2015] NSWCATAD 130 (Ceepee) Montgomery SM said:

10 Where a court or a tribunal is conferred with the discretion to award costs, such discretion must be exercised judicially and not capriciously (Oshlack v Richmond River City Council [1998] HCA 11; (1998) 193 CLR 72 at 81). The fundamental rationale for the awarding of costs is that such an award is compensatory, not punitive: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 543; Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at 97.

...

17 It is the applicant for costs who bears the onus of establishing an entitlement to costs in a jurisdiction where the primary rule is that each party bears their own costs : Kurmond Homes Pty Ltd v Spiteri [2015] NSWCATAP 48 at paragraph [18].

The term “special circumstances” is not defined in s 60 or elsewhere. However, s 60(3) provides that, in making a determination as to whether there are special circumstances which warrant a costs award, the Tribunal may have regard to the matters set out in paragraphs (a) to (f) of s 60(3) as well as “any other matter that the Tribunal considers relevant”, s 60(3)(g).

In A J Holdings (NSW) Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 143, (AJ Holdings) Sorensen SM said:

14 It is not enough or sufficient to exercise the discretion that the circumstances are “special”; the special circumstances identified must also “warrant” an order for costs: B and L Linings Pty Ltd and Anor v Chief Commissioner of State Revenue (No 4) (RD) [2008] NSWADTAP 14 (B & L Linings) at [56]; Fitzpatrick Investments Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 103 at [18-21] (Fitzpatrick Investments).

...

15 ... For the purposes of s 60(2), “special circumstances” are circumstances surrounding the conduct of the case that are out of the ordinary, but without having to be extraordinary or exceptional: Megerditchian at [11], Spiteri at [54], [60], eMove at [48], B & L Linings at [56-69], CPD Holdings Pty Ltd (t/as Bathroom Exchange) v Baguley [2015] NSWCATAP 21 (CPD) at [24], [29], [30], [32]. It seems the core of the idea of “special circumstances” is that there is something unusual or different to take the matter out of the ordinary course: Fitzpatrick Investments at [19].

The above description of “special circumstances” has been applied in numerous cases including those referred to in AJ Holdings at [15], in Redmadi Pty Ltd v Chief Commissioner of State Revenue [2017] NSWCATAD 231 at [137], and in Fitzpatrick Investments at [17] and [20]. In particular, at [60] in CRIPPS and Another v G & M DAWSON Pty Ltd and Another; G & M DAWSON Pty Ltd and Another v CRIPPS and Another [2006] NSWCA 81, Santow JA, with whom Mason P and Brownie JA agreed, said that for special circumstances to apply in relation to an application by the Chief Commissioner for costs before the Tribunal and Appeal Panel of the Tribunal’s predecessor, the Administrative Decisions Tribunal (ADT), (in respect of relevantly identical legislation concerning the award of costs ) “For this purpose, it suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional.”

6. In Westbury v The Owners – Strata Plan No 64061 [2021] NSWCATEN 3 this Tribunal which was comprised of Armstrong J, President, J Boland AM ADCJ and M Harrowell, Deputy Presidents considered an application for a civil pecuniary penalty under s 77 of the CAT Act. Section 77 is part of the enforcement jurisdiction of this Tribunal found in Part 5, as is section 73, which was the basis for the referral orders made by me. In determining whether to make a costs order by reference to the provisions of section 60 the Tribunal said at [207] and following

“Special circumstances” in s 60(2) of the NCAT Act are circumstances that are out of the ordinary, but need not be those which are exceptional or extraordinary. These principles are well established and have been consistently applied in this Tribunal: see e.g. Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]; Commissioner for Fair Trading v Edward Lees Imports Pty Ltd (No 2) [2019] NSWCATAP 222 at [8].

Relevant factors to be considered are those contained in s 60(3) of the NCAT Act.

In our view, civil penalty proceedings are not a “special category” for the purpose of s 60(3)(d). There is no statutory provision which mandates the making of a costs order in favour of a successful party in enforcement proceedings brought under Pt 5 of the NCAT Act.

This position can be contrasted with provisions in the former Strata Schemes Management Act 1996, and with current provisions in the NCAT Act (see e.g. NCAT Act, cll 23(1) and 26(1) of Sch 5). In the absence of an express provision in the NCAT Act that compels the Tribunal to award costs to a successful party in civil penalty proceedings brought under Pt 5 of the Act, it should be presumed that s 60 applies to these enforcement proceedings without limitation, and without an assumption that civil penalty proceedings are a “special” category of proceedings that should ordinarily, absent disentitling conduct, result in an award of costs in favour of the prosecuting party.

However, the nature of the proceedings, in effect being ancillary to the making of the original orders and for the purpose of penalising the contravener, is a relevant factor to be considered in respect of s 60(3)(d) of the NCAT Act. Such proceedings are out of the ordinary in the sense that it is expected parties will comply with Tribunal orders according to their terms.

Also relevant when considering the nature of the proceedings is that the applicants have needed to use the procedures open to them under Pt 5 of the NCAT Act, and to expend their own money in taking the enforcement proceedings. There are few remedies available to a party to deal with the circumstances in which the Westburys found themselves. Renewal of the proceedings in the Consumer and Commercial Division of the Tribunal under Sch 4 cl 8 of the NCAT Act appears to be unavailable as there was no “other appropriate order under this Act or enabling legislation [that] could have [been] made when the matter was originally determined”.

While they have a personal interest in enforcing the Tribunal’s orders, they can also be seen as acting in the public interest in prosecuting these proceedings. This is reinforced by the requirement in s 77(2) that an application for an order that a person pay a monetary penalty be made by an “authorised official”. The applicants obtained the consent of the Solicitor-General under s 75(b) of the NCAT Act in order to commence the proceedings. Having obtained that consent, as noted previously, they were “authorised officials” under s 77(2)(b).

……………………………….

Second, while a party’s success in proceedings is relevant to the question of costs, it is not determinative. In this case, given the concession of the Owners Corporation that the orders were breached, and lack of clear argument as to whether it had a “reasonable excuse”, the “relative strengths” of the parties’ claims are matters weighing in favour of a costs order (s 60(3)(c)). On the other hand, the early concession (made in circumstances where it was necessary for the Tribunal to determine what, if any, penalty should be imposed) is a matter weighing against making a costs order.

Considering all these matters, what is determinative is that orders of the Tribunal were not complied with, a situation that has not yet been remedied. Significant work is still required to rectify the waterproofing and drainage issues. Some of this work could have been done. There was no attempt made by the Owners Corporation to approach the Tribunal for a stay or an extension of time to comply with the amended rectification order. While an order for costs is compensatory, and is not made to punish the unsuccessful party, the applicants have been required to incur costs to take enforcement action.

Consequently we are satisfied there are special circumstances for the purposes of s 60(2) of the NCAT Act, and that an order for costs in favour of the applicants should be made on an ordinary basis.

We do not think a special order should be made for the costs to be paid on an indemnity basis.

The applicant’s submissions

7. The applicant relied principally on submissions that he had a strong case that the respondent had disobeyed orders of this Tribunal as the basis for a referral to the Supreme Court, referring to section 60 (3) (c), and that the proceedings were complex because the respondent raised arguments which had not been considered in prior proceedings before the Tribunal at first instance, and the Appeal Panel as well as in earlier proceedings in the Supreme, referring to section 60 (3) (d).

8. The applicant also emphasised that he was compelled to initiate the referral proceedings in order to secure compliance with favourable orders which had been made by this Tribunal. In so submitting the applicant relied upon observations made by Megarry VC in EMI Records Ltd v Ian Wallace Ltd [1983] Ch 59 at 76 to the effect that “special costs orders” are appropriate in cases of contempt because “nothing should be done to deter a person from bringing a contempt to the notice of the court; and the risk of having to bear any of the costs will often be a real deterrent.” There was accordingly a public interest in facilitating contempt proceedings to ensure that orders made by a competent court were complied with. In so submitting the applicant also referred to the observations made by this Tribunal in Westbury extracted above. The applicant also emphasised two matters to which I had referred in my reasons when determining to refer the proceedings namely, a finding that the respondent had demonstrated a contumacious disregard for the clear terms of the orders made by this Tribunal and had consistently declined to comply with them, and secondly that the public interest in the administration of justice requires compliance with orders whether or not compliance also served individual or private interests.

9. Finally, the applicant submitted that in all the circumstances an order for the payment of costs on an indemnity basis was justified.

10. In detailed submissions in reply the respondent denied that special circumstances existed as described in subsection (3) of section 60. In particular the respondent submitted:

1. It had not conducted the proceedings in a way that unnecessarily disadvantaged the applicant, nor had it been responsible for unreasonably prolonging the time taken to complete the proceedings. I agree.

2. It had genuinely endeavoured to comply with the Orders originally made by the Tribunal and had relied upon arguments which it advanced in good faith based on its understanding of the relevant statutory matrix which applied to its operations. Such an argument is inconsistent with the findings made by me that the respondent had demonstrated a contumacious disregard for the clear terms of the orders made by this Tribunal and had consistently declined to comply with them.

3. Neither the nature of the proceedings nor their complexity warranted them being characterised as “special”. I disagree, and in doing so I gratefully adopt and adapt the observations of the Tribunal in Westbury set out above to the following effect

However, the nature of the proceedings, in effect being ancillary to the making of the original orders and for the purpose of penalising the contravener, is a relevant factor to be considered in respect of s 60(3)(d) of the NCAT Act. Such proceedings are out of the ordinary in the sense that it is expected parties will comply with Tribunal orders according to their terms.

Furthermore, as was observed in Westbury there are few remedies available to a party to deal with the circumstances in which the applicant found himself in these proceedings. They are limited to those contained in Part 5 of the CAT Act.

4. That the proceedings were vexatious because the applicant had not engaged with the respondent concerning its “genuine attempt to enter into a site agreement.” That argument was rejected in the substantive referral matter.

5. That there has been no failure by the respondent to comply with its duties imposed by section 36 (3) of the CAT Act. I agree.

Consideration

11. In determining this costs application I firstly have regard to the underlying circumstances of the substantive referral proceedings. The applicant had the benefit of orders in his favour made by this Tribunal at first instance. The respondent unsuccessfully initiated appeals to the Appeal Tribunal and then to the Supreme Court of NSW. Notwithstanding its lack of success in seeking to have the original orders set aside, the respondent persisted in refusing to comply with the orders based on matters which had not previously been raised before the Tribunal at first instance or in either appeal. In the course of the substantive referral proceedings I found that there was no substance in the matters raised by the respondent to attempt to justify a failure to comply with the first instance orders. Some flavour of these circumstances may be gained from the following extract from the decision in the substantive referral proceedings

71   In the circumstances of these proceedings it is clear that at all times the respondent was aware of the terms of the Orders, but nevertheless persistently insisted that it was entitled to decline to obey them because of a belief, which I have found to be mistaken, that its statutory obligations otherwise allowed it to take an alternative course of action. That belief also misunderstands the clear language used in the Orders.

72    There is in evidence correspondence between the applicant and the respondent about these matters and whether the respondent was entitled to continue to maintain the position that it did. It cannot be said in the circumstances that there was any casual, accidental or unintentional excuse for what must be concluded is the respondent’s wilful and persistent disobedience of the provisions of the Orders.

73   I find that the respondent has demonstrated a contumacious disregard for the clear terms of the Orders and has consistently declined to comply with them.

Conclusions

74   For the reasons advanced above, I find that the conduct of the respondent in failing to have provided a form of site agreement in compliance with the Orders is capable of amounting to contempt.

75   I note for completeness that both parties accepted that the reference in Order 1 to the Act should be taken to be a reference to the relevant Regulation.

76   In determining to accede to the applicant’s request to refer the matter to the Supreme Court of NSW I take into account two matters. The first is encapsulated in observations that I made in Bott at [35] concerning the public interest in upholding orders made by this Tribunal

35 The High Court of Australia revisited the civil/criminal contempt dichotomy in Witham v Holloway [1995] HCA 3. It is not necessary that I refer to the judgements in those proceedings at this stage, save to note that the joint judgement of Brennan, Deane, Toohey and Gaudron JJ applied Mudginberri and emphasised that “the public interest in the administration of justice requires compliance with all orders and undertakings, whether or not compliance also serves individual or private interests.”

77   The second matter involves the personal circumstances of the applicant. He has had the benefit of Orders made in his favour which relate to property which he acquired in 2010. He has been precluded from enjoying the statutory benefit of a written site agreement despite the passage of over 10 years. Furthermore, he has had the benefit of those Orders despite unsuccessful attempts by the respondent to deprive him of them at least since 15 October 2019, but with no ability to enforce them.

78 Enforcement of orders made by this Tribunal is limited by the provisions of the CAT Act. In the circumstances which have prevailed to date in these proceedings referral of the respondent to the Supreme Court for determination as to whether it should be held guilty of contempt of this Tribunal and if so the fixing of an appropriate penalty appears to be the only course of action now available to the applicant to seek to enforce rights which have been afforded to him by Orders of this Tribunal, upheld on appeal by an Appeal Panel and the Supreme Court of NSW.

79   I propose to make an order for referral accordingly.

12. The reasoning adopted by this Tribunal in Westbury is compelling. The application for referral made by the applicant was clearly ancillary to the making of the original orders and for the purpose of seeking to enforce his entitlement to compliance with the orders made his favour. This is a relevant factor to be considered in respect of s 60(3)(d) of the NCAT Act. These proceedings are “out of the ordinary in the sense that it is expected parties will comply with Tribunal orders according to their terms”.

13. Also relevant when considering the nature of the proceedings is that the application for the referral was one of the very few courses open to the applicant to seek to enforce the orders made by the Tribunal. He has been required to “expend (his) own money in taking the enforcement proceedings.” Further, as I have previously observed the applicant may be seen as acting in the public interest in initiating the referral proceedings.

14. In all the circumstances I conclude that the matters which I have outlined above constitute “special circumstances” for the purpose of section 60 of the CAT Act and that the applicant is entitled to a costs order in his favour.

Indemnity costs

15. The power to award costs is governed by the provisions of section 60 (4) of the CAT Act. In making a costs order the Tribunal is empowered to order that they be assessed on the basis set out in the legal costs legislation defined in section 3A of the Legal Profession Uniform Law Application Act 2014, “or on any other basis.” The legal costs legislation referred to is defined in section 3A of that Act to include costs made under “local regulations” and the costs assessment regime created by Part 7 of that Act. It is not necessary for current purposes that I examine these matters any further, for reasons which will become apparent.

16. The applicant sought that his costs be assessed on an indemnity basis. This is usually contrasted with costs assessed on a “party-party” basis and should also be contrasted with what is known as “solicitor – client” costs. Indemnity costs have generally been awarded on the basis that their quantum is higher when compared with a scale of costs which might otherwise apply under Rules of Court. They are intended to provide an incentive to litigants to resolve litigation in a sensible manner by accepting an offer to settle made during the course of negotiations. If a party is less successful in the proceedings than an offer made, the party is usually made to suffer an adverse indemnity costs order. Introduction of new cost regimes to be found, for example, in the Legal Profession Uniform Law Application Act 2014 and the applied Legal Profession Uniform Law (NSW) blur the distinctions formerly made between costs on a party-party basis, indemnity costs and costs allowed on a solicitor-client basis.

17. There is a general description of the type of costs orders which may be made by reference to legislation formerly governing proceedings in the District Court in the NSW Court of Appeal in Bouras v Grandelis [2005] NSWCA 463. For reasons which will appear, it is not necessary that I deal with this aspect further, save to comment that in considering an appropriate “indemnity costs” order, I have adapted the definition then contained in the current legislation as referred to in Bouras.

18. I have not been provided with detailed submissions concerning the relevance of the types of costs orders to which I have referred, but I am able to dispose of these proceedings on the basis of the principles which I have applied in determining that it is appropriate to make a costs order in the applicant’s favour. An important basis for doing so is set out in [12] and [13] above. In seeking to facilitate compliance by the respondent with the orders made in his favour, and in pursuing the public interest in so doing the applicant should not be unduly out of pocket and should be entitled to recover all of his legal costs other than those which are of an unreasonable amount or have been unreasonably incurred and any doubts which the assessor may have as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved in favour of the applicant. I propose to order accordingly.

Orders

19. I make the following orders

1. The respondent is to pay the costs of the applicant assessed in the manner set out hereunder in default of agreement.

2. Such costs are to be assessed under the provisions of the legal costs legislation as defined in section 3 A of the Legal Profession Uniform Law Application Act 2014, but on the basis that the applicant shall be entitled to recover all of his legal costs other than those which are of an unreasonable amount or have been unreasonably incurred and any doubts which the assessor may have as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved in favour of the applicant

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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

Amendments

24 May 2022 - Coversheet Representation details amended from 'Legal Aid NSW (Applicant)' to 'Tenants Union of NSW Co-op (Applicant)'.

Decision last updated: 24 May 2022