Rawlinson v Al Masri

[2017] NSWCATCD 92

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Rawlinson v Al Masri [2017] NSWCATCD 92
Hearing dates:	On the papers 21 November 2017
Date of orders:	28 November 2017
Decision date:	28 November 2017
Jurisdiction:	Consumer and Commercial Division
Before:	P Boyce, Senior Member
Decision:	The Tribunal orders that Aniceta Mondejar Rawlison, pay Tisseer Harmad Ismail Al Masri his costs on an indemnity basis as agreed or assessed
Catchwords:	HOME BUILDING – indemnity costs
Legislation Cited:	Civil and Administrative Tribunal Act 2013 Civil and Administrative Tribunal Rules 2014
Cases Cited:	Calderbank v Calderbank [1973] 3 All ER 333 Gaynor v Burns [2015] NSWCATAP 150 Cripps v G & M Dawson [2006] NSWCA 81 Nguyen v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen [2015] NSWCATAP 264 Cihan v City Tobacconist Pty Ltd & Gebara [2016] NSWCATCD 26 Shen v Bonita, Lie & Go [2015] NSWCATCD 118 Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin [1997] HCA 6 Oshlack v Richmond River Council (1998) CLR 72 Thompson v Chapman [2016] NSWCATAP 6 (7 January 2016) ABB Engineering Construction Pty Ltd v Abigroup Contractors Pty Ltd BC200305610 Hamod v New South Wales (2002) 188 FCR 659 InterTAN Inc v DSE (Holdings) Pty Ltd [2015] FCAFC 54
Category:	Costs
Parties:	Applicant: Aniceta Mondejar Rawlison Respondent: Tisseer Harmad Ismail Al Masri
Representation:	Solicitors: Applicant: Litigant in person Respondent: T & S Law Firm Counsel Respondent: H. Grace
File Number(s):	HB 16/14625
Publication restriction:	Unrestricted

REASONS FOR DECISION

Application

1. On 27 March 2017 the Tribunal made orders in the substantive application dismissing the application.

2. On 30 June 2017 the respondent made an application for costs and supported that application with submission and evidence.

3. On 19 July 2017 the Tribunal made directions in respect of the respondents cost application as follows:

The Tribunal directs that:

The applicant, Aniceta Mondejar Rawlinson is to file submissions in response to the respondent’s application for costs limited to no more than 4 pages in length, with the Tribunal by mail and give a copy to the respondent, Tisseer Harmad Ismail Masri, solicitor at T & S Law, [redacted] MLC Centre [redacted] Martin Place Sydney NSW 2000 ([redacted]) on or before 9 August 2017.

The respondent, Tisseer Harmad Ismail Masri, is to file any reply to the applicant’s response, limited to no  more than 2 pages in length  with the Tribunal by mail and give a copy to the applicant, Aniceta Mondejar Rawlinson on or before 18 August 2017.

The Tribunal proposes to order that the respondent’s cost application be determined on the papers without a hearing. If the applicant, Aniceta Mondejar Rawlinson, objects to the Tribunal making such an order that the application be determined on the papers without a hearing, then she must make submissions as to such an order. “

4. On 22 August 2017 the applicant sent to the Tribunal an email including a paragraph “ Regarding the respondent cost[s], I have nothing to answer for as I paid the respondent for the tiling job he done [sic] at my property and now tiles in the kitchen are unstable and dangerous”.

Jurisdiction and legislation

5. The Civil and Administrative Tribunal Act 2013 (“CATA”) provides at s 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, whether a party has refused or failed to comply with the duty imposed by section 36 (3),

(f) 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 Division 11 of Part 3.2 of the Legal Profession Act 2104 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.

6. The Civil and Administrative Tribunal Rules 2014 at rule 38 provides:

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. CATA provides at s36 that:

Guiding principle to be applied to practice and procedure

(1) The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

(2) The Tribunal must seek to give effect to the guiding principle when it:

(a) exercises any power given to it by this Act or the procedural rules, or

(b) interprets any provision of this Act or the procedural rules.

(3) Each of the following persons is under a duty to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal:

(a) a party to proceedings in the Tribunal,

(b) an Australian legal practitioner or other person who is representing a party in proceedings in the Tribunal.

(4) In addition, the practice and procedure of the Tribunal should be implemented so as to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings

(5) however, nothing in this section requires or permits the Tribunal to exercise any functions that are conferred or imposed on it under enabling legislation in a manner that is inconsistent with the objects or principles for which that legislation provides in relation to the exercise of those functions.

8. Section 50 of CATA provides:

50 When hearings are required

(1) A hearing is required for proceedings in the Tribunal except:

(a) in proceedings for the granting of leave for an external or internal appeal, or

(b) in connection with the use of any resolution processes in proceedings, or

(c) if the Tribunal makes an order under this section dispensing with a hearing, or

(d) in such other circumstances as may be prescribed by the procedural rules.

(2) The Tribunal may make an order dispensing with a hearing if it is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Tribunal.

(3) The Tribunal may not make an order dispensing with a hearing unless the Tribunal has first:

(a) afforded the parties an opportunity to make submissions about the proposed order, and

(b) taken any such submissions into account.

(4) The Tribunal may determine proceedings in which a hearing is not required based on the written submissions or any other documents or material that have been lodged with or provided to the Tribunal in accordance with the requirements of this Act, enabling legislation and the procedural rules.

(5) This section does not prevent the Tribunal from holding a hearing even if it is not required.

SUBMISSIONS

9. The Tribunal is satisfied that the parties have been afforded an opportunity to make submissions about the proposed order to dispense with a hearing and to determine the costs application on the papers.

10. The applicant made no submissions in regard to the proposal of the Tribunal to dispense with a hearing as to the costs application.

11. The issue of costs can be adequately determined in the absence of the parties by consideration of the written submissions lodged with or provided to the Tribunal and the Tribunal will take those submissions into account.

12. Pursuant to Section 50(4) the Tribunal exercises its discretion to determine the application on the papers.

Respondent’s submissions

13. The respondent seeks a costs order against the applicant on an indemnity basis.

14. The applicants claim was for damages in the amount of $42,510.00 for alleged defective tiling work done by the respondent.

15. The respondent submits that section 60(2) applies if special circumstances warrant an award of costs. In considering if special circumstances apply the Tribunal must have regard to section 60(3) of CATA.

Special Circumstances

No tenable basis in law-s60(3)(c)

16. The finding by the Tribunal that:

1. The respondent was not the proper respondent: see [48];

2. There was no contract between the applicant and the respondent: see [47]; and

3. The respondent did not owe the applicant a duty of care: see[49];

Support a finding that there was no legal basis on which the applicant could succeed.

No Tenable basis in fact-s60(3)(c)

17. The Tribunal found at [46]-[47] the applicant had failed to discharge the burden of proof with respect to her allegations that the tiling work was defective and the cause of the loss that she complained of. The “expert” reports relied upon by the applicant were not accepted by the Tribunal and on the unchallenged evidence before the Tribunal the respondents work was neither inadequate or the cause of the applicant’s loss.

18. The volume of evidence relied upon by the applicant was largely improbable in light of objective factual circumstances and was deficient and incapable of supporting the allegations made by her.

Proceedings unnecessarily disadvantaged the respondent

19. The applicant refused to comply with the direction of the Tribunal made on 15 August 2016 by allowing the respondent and his expert witness access to her property to carry out an inspection of the alleged defective works. It was not until a week before the hearing that the applicant allowed the respondents expert access to the property to carry out his inspection.

Unreasonable refusal of the respondent’s offer of compromise-s60(3)(g)

20. On 25 November 2016 the respondent’s solicitor sent an offer of compromise to the applicant in the form of a Calderbank v Calderbank [1973] 3 All ER 333, in the following terms:

1. The applicant’s claim be dismissed;

2. The respondent undertakes to waive any rights to payment from the applicant in respect of tiling work done by the respondent at the applicant’s property; and,

3. Each party to bear their own costs

21. The terms of the offer of compromise were unreasonably rejected by the applicant as the terms of the offer were more favourable than the result of the proceedings that the applicant obtained.

Applicant Submissions

22. The applicant’s only submission is that contained in her email of 22 August 2017. That extent of that submission is that she has “nothing to answer”.

23. The applicant has been given an opportunity to respond to the respondent’s submissions and has not placed before the Tribunal anything in answer to the respondent’s submission. In the absence of submissions from the applicant addressing the respondent’s submission the Tribunal is in a position that it can only determine the application for costs on the respondent’s unchallenged submissions.

FINDINGS

24. The general rule expressed in Oshlack v Richmond River Council (1998) CLR 72 is that a successful party has a reasonable expectation of being awarded costs against the unsuccessful party. The usual principles that should apply in the exercise of discretion are that costs should follow the event.

25. The Tribunal has a general discretion under rule 38 to award costs. Where there is a general discretion to award costs the correct principle is that the Tribunal in exercising discretion should have regard to the nature of all relevant factors: Thompson v Chapman [2016] NSWCATAP 6 (7 January 2016) at [72].

26. The purposes of a costs order is to compensate or indemnify a successful party against the expenses to which it has been put (Latoudis v Casey [1990] HCA 59).

27. In Thompson v Chapman at [71] the Appeal Panel said:

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: Oshlack v Richmond River Council per Gaudron and Gummo JJ at 88 and Kirby J at 121-123.

28. In Gaynor v Burns [2015] NSWCATAP 150 the Appeal Panel considered the decision of Cripps v G & M Dawson [2006] NSWCA 81 where Santow JA considered the words “special circumstances”. The meaning attributed is that they circumstance that are special circumstances are circumstances that were clearly out of the ordinary and grossly unreasonable. They do not need to be extraordinary or exceptional. While a finding of “serious unfairness” is not a prerequisite to determining that there are no special circumstances, it is nonetheless a highly relevant consideration.

29. In Cihan v City Tobacconist Pty Ltd & Gebara [2016] NSWCATCD 26 the Tribunal held that “even if Rule 38(3) does not apply given the quantum of the award to the applicant, in that the applicant has been put to the expense of obtaining legal representation to prosecute the claim against the respondents’ who put forward defences that lacked factual and legal substance as noted in paragraph 4 of the reasons.” The Tribunal went on to follow Cripps.Fairness dictates that the unsuccessful party typically bears the liability for costs unless it is demonstrated that some other order is appropriate:

Nguyen v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen [2015] NSWCATAP 264. “While the discretion to award costs under Rule 38 is unfettered, in our view costs should generally “follow the event”, recognising however that factors may exist that militate against the successful party recovering all of its costs”.

30. In ABB Engineering Construction Pty Ltd v Abigroup Contractors Pty Ltd BC200305610 per Einstein J at 14, His Honour carried out an extensive review of the authorities distilling a number of principles relevant to the determination of costs, in particular:

A successful litigant is generally entitled to an award of costs. Costs are not awarded to punish an unsuccessful party. The primary purpose for an award of costs is to indemnify the successful party. If litigation had not been brought…by the unsuccessful party the successful party would not have incurred the expense it did. As between the parties fairness dictates that the unsuccessful party typically bears the cost of the unsuccessful litigation. The traditional exceptions to the usual order as to costs focus on conduct of the successful party that disentitles it to the beneficial exercise of the discretion In Anglo Cyprian Trade Agencies v Paphos Wine Industries, Devlon J referred to “misconduct” by the successful party as the basis for departure from the usual order. In that case, this conduct was construed to be misconduct relating to the litigation in circumstances leading up to it.

31. The Tribunal is satisfied that the provisions of rule 38(2)(b) are enlivened to dispel the exclusionary provision that special circumstances must exist if the general rule that each party should pay their own costs is to be avoided. There is no necessity for special circumstances to be present in order to award costs in this matter. Despite no formal pleadings or evidence to support the claim, all that is required is that the claim exceeds $30,000. It does and therefore Rule 38 applies.

32. Notwithstanding that Rule 38 applies, the Tribunal retains discretion as to whether it will award costs. The respondent has been successful in his contention that the Tribunal did not have jurisdiction and he is entitled to expect that his costs would be ordered to be paid by the applicant in the ordinary course. The Tribunal must consider all the relevant factors, which it has done in consideration of the submissions: Thompson v Chapman. The applicant has not demonstrated why the Tribunal should not exercise discretion to make a costs order other than in the ordinary course in accordance with the authorities: Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin; Citywide Developments Pty Ltd v Dawn Pienga; Dawn Pienga v Citywide Developments Pty Ltd.

33. If the Tribunal is wrong in making the finding that Rule 38 applies. Then is considers if special circumstances exist. The Tribunal is satisfied that if it needs to find special circumstances, then it can do so in these proceedings, for the reasons set out in the respondent’s submissions. Those circumstances need not be extraordinary or exceptional. It was necessary for the respondent to defend the claim and was entirely successful in doing so.

34. In the ordinary course, the Tribunal is satisfied that it can exercise its discretion under Rule 38 that the respondent is entitled to an award of costs against the applicant.

35. The applicant contends that he is entitled to indemnity costs where an offer of compromise has been unreasonably rejected.

36. In InterTAN Inc v DSE (Holdings) Pty Ltd [2015] FCAFC 54 at [11], Ryan, Finkelstein and Bennett JJ identified many cases in which indemnity costs will be awarded:

A review of the authorities shows that there are various categories of cases in which solicitor and client or indemnity costs can be awarded. They include cases where solicitor client or indemnity costs can be awarded. They include cases where the bringing of an application is ‘high handed’: Australian Guarantee Corporation Ltd v De Jager [1984]VR 483, 502:where an application has ‘no chance of success’: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1998) 81 ALR 397, 401 or is ‘hopeless’: J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers, Western Australian Branch (No 2) (1993) 46 IR 301,303; where an application is ‘unnecessary’: Ragata Developments Pty Ltd v Westpac Banking Corporation (unreported, Federal Court, 5 March 1993); where an application is brought and prosecuted ‘not for bona fide purposes of protecting and enforcing a legal right, but to achieve an ulterior or extraneous purposes’: Ragata Developments Pty Ltd v Westpac Banking Corporation (unreported, Federal Court, 5 March 1993); where an application is commenced in wilful disregard of known facts or contrary to well established law: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1998) 81 ALR 397, 401: where there has been ‘some relevant delinquency on the part of the unsuccessful party’: Oshlack v Richmond River Council (1998) 193 CLR 72, 89; where the justice of the case warrants such an order: Andrews v Barnes (1887) 39 Ch D 133, 141: and where there are some special or unusual features in a case to justify the court the exercising its discretion in this way: Preston v Preston [1932] Fam 17, 39

37. The principle of when indemnity costs will be applied was explained in Hamod v New South Wales (2002) 188 FCR 659 at [20] per Gray J, with whom Carr J and Goldberg J agreed:

Indemnity costs are not designed to punish a party for persisting with a case that turns out to fail. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as normal costs order could not be expected to do, when the court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure costs.

38. The Tribunal is satisfied that respondent has demonstrated that the proceedings against him by the applicant have been brought by the applicant:

1. With no chance of success, the finding being that the respondent was not a contracting party;

2. in wilful disregard of known facts or contrary to well established law;

3. where a reasonable offer of compromise was rejected by the applicant which would have resulted in more favourable outcome for the applicant than was achieved by proceeding with the application

Cost Order

39. The Tribunal is satisfied that the applicant should pay the respondent’s costs on an indemnity costs.

40. The Tribunal orders that Aniceta Mondejar Rawlison, pay Tisseer Harmad Ismail Al Masri his costs on an indemnity basis as agreed or assessed

P Boyce

Senior Member

Civil and Administrative Tribunal of New South Wales

28 November 2017

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: 23 January 2018