Posted on April 16, 2018 by
Can an unrepresented litigant claim costs for out of pocket expenses in legal proceedings?
In Profitability Consulting Pty Ltd v Thorpe  NSWCATAP 41, the Appeal Panel of the NSW Civil and Administrative Tribunal (‘Appeal Panel‘) considered an application for costs brought by two unrepresented litigants (‘the Thorpes‘) to recoup their out of pocket expenses for childcare, accommodation and travel which they incurred to attend a hearing.
The main issue for the Appeal Panel was whether the items which were the subject of the Thorpes’ costs application being childcare, accommodation and travel, constituted ‘costs’ within the meaning of s60 of the Civil and Administrative Tribunal Act 2013 (‘NCAT Act‘).
This decision is an important decision as the NCAT has in the past made costs orders in proceedings in favour of unrepresented applicants for the payment of costs such as traveling costs of applicants.
The Thorpes made the application for costs against Profitability Pty Ltd (the Appellant) in circumstances where they were informed in the midst of travelling from their home on the NSW-Victorian border to attend the hearing at the NCAT in the Sydney, that the appeal had been withdrawn.
The law on costs in NCAT
Pursuant to s60(1) of the NCAT Act, each party to proceedings pays their own costs. Relevantly, s60(2) of the NCAT Act confers the NCAT with the discretion to awards costs if it is satisfied that there are special circumstances warranting such an order to be made.
Pursuant to s60(5) of the NCAT Act, ‘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.
The Thorpes’ main argument was that the word ‘costs’ in the provision should be given its ordinary meaning. They asserted that each of the items on which their costs application was based was “incidental to the appeal” and was therefore costs within the meaning of s60(5) of the NCAT Act.
The Appeal Panel disagreed and ultimately decided that the expenses sought by the Thorpes were not legal costs and therefore not recoverable under s60 of the NCAT Act.
Reasoning of the Appeal Panel
The Appeal Panel cited the NCAT Appeal Panel decision of Hammond v Ozzy’s Cheapest Cars Pty Ltd t/as Ozzy Car Sales  NSWCATAP 65 which applied the High Court decision of Cachia v Hanes (1994) 179 CLR 403 and held at  that the term ‘costs’ for the purpose of s60 of the NCAT Act means “the types of costs recoverable from legal proceedings and that the legal principles relating to what ‘costs’ may be ordered by a Court to be paid apply in relation to the Tribunal, except to the extent that they are modified by the Act or other applicable legislation”.
In Hammond, the Appeal Panel found at  –  that the costs that the NCAT can order to be paid under s60(2) of the NCAT Act will not include compensation for time spent by a litigant who is not a lawyer in preparing and conducting his or her case.
The Appeal Panel also cited the High Court Case of Cachia which is an authority for the proposition that costs are awarded by way of partial indemnity for professional legal costs actually incurred in the conduct of litigation and are not intended to be a comprehensive compensation for any loss suffered by a party in litigation such as the expenses of travel and loss of time.
The Appeal Panel held that the term ‘costs’ meant legal costs because this was consistent with s60(4)(b) of the NCAT Act which refers to the assessment of legal costs.
Section 6 of the Uniform Law defines legal costs as:
(a) amounts that a person has been or may be charged by, or is or may become liable to pay to, a law practice for the provision of legal services, or
(b) without limitation, amounts that a person has been or may be charged, or is or may become liable to pay, as a third party payer in respect of the provision legal services by a law practice to another person –
(c) including disbursements but not including interest.
The Appeal Panel noted at  that it would be anomalous if s60 of the NCAT Act permitted the NCAT to award expenses outside the ambit of the definition of legal costs in the Uniform Law but nonetheless permitted the NCAT to order that those costs be assessed under that Act.
Were the out of pocket expenses disbursements?
The Appeal Panel found that childcare, travel and accommodation could not be considered disbursements because it refers to money which for the purposes of a proceeding, have been actually paid out to other people, such as witnesses, counsel, professional advisers etc, that cover remuneration for the exercise of professional legal skill by a lawyer.
In essence, the Appeal Panel held that the defendants out of pocket expenses were not disbursements and they could not be recoverable as disbursements had the respondent been legally represented.
A copy of the full decision of the Appeal Panel is found here.
If you wish to discuss the issues raised in this post or any matter relating to NCAT proceedings, please contact Carlo Zoppo, Partner on 8235 9705 or by email at email@example.com.