District Court New South Wales

• Medium Neutral Citation: Fowler Homes Pty Ltd v Roberts [2014] NSWDC 3
• Hearing dates: 20/02/2014
• Decision date: 21 February 2014
• Jurisdiction: Civil
• Before: Elkaim SC DCJ

Decision

Summons dismissed with costs

• Catchwords: CTTT appeal, costs
• Legislation Cited: Consumer Trader and Tenancy Tribunal Act 2001; Consumer Trader and Tenancy Tribunal Regulation 2009; Uniform Civil Procedures Rules 2005
• Cases Cited: House v The King (1936) 55 CLR 499; James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296
• Category: Principal judgment
• Parties: Fowler Homes Pty Ltd (ABN 89 066 046 366) (Plaintiff); Denis Roberts (First Defendant); Theresa Roberts (Second Defendant)
• Representation: H W M Stitt (Plaintiff); N J Allan (Defendants); Hunter Lawyers (Plaintiff); Harish Prasad & Associates (Defendants)
• File Number(s): 2013/00275427
• Publication restriction: No

Judgment

1 By a Summons Commencing an Appeal filed on 11 September 2013 the plaintiff seeks orders setting aside or quashing orders made in the Consumer, Trader and Tenancy Tribunal (the "CTTT") by Mr Goldstein (the Member) on 13 August 2013.

2 The Consumer Trader and Tenancy Tribunal Act 2001 (the "CTTT Act") has been repealed but remains effective for present purposes under saving provisions.

3 The origin of the dispute between the parties lies in a contract under which the plaintiff built a house for the defendants. For convenience I will refer to the plaintiff as the builder and the defendants as the homeowners.

4 Proceedings were originally commenced by the homeowners in the CTTT in November 2009. The matter ultimately came on for hearing before the Member on 6 June 2012. The hearing lasted two days. The Member gave his decision on 17 July 2012. The decision can be found at Annexure AP1 to the affidavit of Mr Pascale dated 12 December 2013. All the annexures that I will refer to are annexures to this affidavit.

5 The orders made by the Member are set out on the first page of Annexure AP1. In July 2012 a Summons was lodged appealing against the Member's orders. An Amended Summons was filed about a month later. The appeal came on for hearing on 30 October 2012 before Olsson SC DCJ. She gave her decision on 9 November 2012. This decision is at Annexure AP3.

6 The appeal that came before her Honour concerned Orders 2, 3, 5 and 6 of the Member's orders. Thus there was no appeal in respect of Orders 1 and 4.

7 The appeal was successful to the effect that Orders 2, 3, 5 and 6 were set aside. Her Honour dealt with the costs of the appeal but remitted the matter back to the Member to deal with the costs of the proceedings that had taken place before him.

8 The remitted issue was heard by the Member on 28 May 2013. He gave his decision on 13 August 2013. It can be found at Annexure AP4. He made the following orders:

"1. The respondent must pay the applicants' costs of and incidental to the proceedings, with the exception that the applicants must pay 90% of the respondent's costs of the Tribunal hearing on 6 and 7 June 2012.

2. The applicants must pay the respondent's costs of the Tribunal hearing on 8 December 2011.

3. Failing agreement on the question of costs payable pursuant to orders 1 and 2, such costs are to be assessed on the basis set out in Division II of Part 3.2 of the Legal Profession Act 2004."

9 The Summons that I have heard is an appeal from the orders made, in respect of costs, on 13 August 2013.

10 The starting point in my decision is to record that the appeal is brought pursuant to Section 67(1) of the CTTT Act. Accordingly it must concern "a question with respect to a matter of law ...".

11 Counsel for the builder identified "three main points which the appeal against the decision of the CTTT was based". These three points were:

"1) The Member erred in his determination of "the event" when applying the principle that "costs follow the event";

2) The Member failed to take into consideration evidence about the way in which the Respondents (the Roberts) conducted the proceedings;

3) The Member failed to give appropriate consideration to the Calderbank offer which was made by the Applicants (Fowler Homes) on 9 December 2011." (plaintiff's written submissions).

12 The written submissions do not identify, in terms, the question with respect to a matter of law that is required under Section 67(1). Counsel for the plaintiff, however, in oral submissions, said that the three points set out above were themselves errors of law. In addition, he said there had been a misapplication of the Uniform Civil Procedures Rules 2005 (the "UCPR"), in particular Rule 42.1 and of Section 53 of the CTTT Act. He also said that there had been a miscarriage of the discretion in relation to costs. He submitted the discretion had not been exercised judicially.

13 The homeowners concentrated their submissions mainly on the gateway to the appeal, namely the terms of Section 67(1) and in particular the requirement for there to have been a decision on a question with respect to a matter of law. Counsel submitted that there had been a proper exercise of the discretion by the Member and he certainly had not offended the bounds set in House v The King (1936) 55 CLR 499 at 504.

14 In my view, for the reasons that follow, the Summons must be dismissed because the builder has failed to demonstrate an error that qualifies for consideration under Section 67(1).

15 I think it first of all necessary to make some general comments about the Member's decision (Annexure AP4). In my view the decision is a well reasoned decision highlighting the relevant facts, discussing the appropriate law and reaching a conclusion based on the matters set out.

16 I will now deal with the three main points upon which the appeal was said to be based.

17 The result of the decision of Olsson SC DCJ, combined with matters that were not subject of appeal, was that the proceedings ended with orders by which the builder was to pay the homeowners $15,486.33 plus an extra (small) amount referrable to overheads and supervision and GST concerning the skirting boards claim of $460. Although I was not given the final amount it would not have been beyond $16,000.

18 The Member's approach was to regard the above result as the 'event' which founded the appropriate costs order. Therefore as costs followed the event the builder was ordered to pay the homeowners' costs of the proceedings. Notwithstanding the general rule he then took into account the success of the builder in defending the bulk of the claims and so ordered the home owners to pay 90% of the costs of the two days of hearing. This approach is consistent with authority (for example James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at paragraphs 31 to 36).

19 The Member also awarded the builder the costs of an adjourned hearing date.

20 Essentially therefore, the Member regarded the event, for costs purposes, as the homeowners' 'success' in recovering the almost $16,000.

21 The builder submitted that this conclusion disclosed fundamental error. It was said that the event should encompass the whole of the proceedings and take into account that the very substantial claim originally made by the homeowners had been almost entirely defeated leaving only a figure of $15,026.33 which had been agreed on the first day of hearing plus another $460, which had not been subject to the appeal, plus the minor extras that I have mentioned above. Looked at globally, therefore, the builder said that the proceedings had failed and therefore an order following the event should be one in which the homeowners paid the whole of the costs of the proceedings to the builder.

22 A great deal was made about the size of the original claim, well over $400,000. This figure was, however, reduced within about six weeks and then further reduced as the parties engaged experts and a Scott Schedule was produced.

23 The agreement as to the $15,026 was only reached on the first day of hearing creating an ultimate result in which there were orders that the builder pay moneys to the homeowners.

24 I think the Member's identification of the event was correct and that his approach to then modify the normal costs order was an appropriate way to deal with the exceptional circumstances of the case. For the Member to have reached a conclusion that the homeowners had entirely lost the proceedings would, in my view, have been an error notwithstanding that substantial parts of the case were lost.

25 The fact that there was an agreement in relation to the $15,026 does not assist the builder because this agreement did not occur until the first day of hearing.

26 The second of the builder's main points concerned the alleged failure of the Member to take into account the manner in which the homeowners had conducted the proceedings. A number of assertions were made about dilatory conduct, changes in tack and amendments to the claims. The difficulty with the submission is that there are also claims made about the conduct of the builder in the proceedings, as set out in the submissions put before the Member (see Annexure A to the affidavit of Mr Prasad dated 19 February 2014). I simply could not reach any final conclusion about either party's conduct based on the submissions (as opposed to evidence) put before me. I do note that an identified failure on the homeowners' part, which caused an adjournment of a hearing date, led to a specific order that the homeowners pay the builder's costs.

27 The third main point is that the Member did not give appropriate consideration to a Calderbank Offer made by the builder on 9 December 2011. The Member does not mention the letter but I do not consider this as any indication of error. Firstly, although the amount offered ($15,000) is very close to the amount ultimately awarded, it is nevertheless below it. Secondly, the letter makes an offer of $15,000 "and" costs of $10,000. There is no evidence to suggest that the amount offered for costs is reasonable or otherwise. I could not conclude that, assuming the letter should be taken into account, that it could be considered as amounting to a reasonable offer or at least an offer that should play a part in any discretion on the question of costs.

28 Turning now to the submission that there had been a miscarriage of the discretion, I think the point is essentially dealt with by my rejection of the builder's three main points. However, if that is not the case then I am of the view that there has not been a miscarriage of the discretion. While I could not say that if I was exercising the discretion I would have reached the same result as the member I certainly do not regard the exercise of the discretion as falling outside the limits prescribed in House v The King.

29 In regard to the alleged misapplication of UCPR 42.1, the first point to note is that the CTTT Act and Regulations govern costs in CTTT matters. Regulation 20(4) is as follows:

"(4) In any proceedings in respect of which the amount claimed or in dispute is more than $30,000, the Tribunal may award costs in relation to the proceedings in such circumstances as it thinks fit."

30 The discretion given in the above regulation is very wide and in my view certainly encompasses an order of the type made by the Member.

31 Another submission made by the builder was that the Member had focussed only on the hearing and not on the whole of the proceedings in coming to his views about costs. I do not think that had he done so, it would have amounted to an error on a matter of law. However, I do not think he did make any error because he has taken into account the result of the whole of the proceedings and then made qualifying orders to cater for the builder's success on a large part of the claims.

32 Having regard to my conclusions set out above I make the following orders:

(1) The Summons Commencing an Appeal filed on 11 September 2013 is dismissed.

(2) The plaintiff is to pay the defendants' costs of the Summons.

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Decision last updated: 26 February 2014