The decision of the Commercial and Consumer Tribunal delivered
on 20 May 2009 provides a timely reminder of the factors considered
by the Tribunal in determining whether indemnity costs should be
awarded against a party.
In the recent case of Sheppard and the Residents of Urimbirra
Retirement Village v Milstern Retirement Services Pty Ltd, John
Sheppard and certain residents of Urimbirra Retirement Village
sought orders that their costs of a previous application before the
Tribunal concerning GST and accounting requirements under the
Retirement Villages Act 1999 be paid by the village operator,
Milstern, on an indemnity basis.
Both parties filed written submissions and agreed that the issue
of costs be determined on the papers.
Issues considered by the Tribunal
The Tribunal set out and considered the relevant provisions in
the Commercial and Consumer Tribunal Act 2003 when determining an
application for costs.
Whilst the application was initially heard over a 2 day period,
it was then re-listed for a further hearing approximately a week
and a half later. In the week prior to the further hearing date,
the applicants made an offer of settlement to Milstern which was
open for acceptance for 3 days. The offer was not accepted by
The applicants conceded that the offer did not comply with
Division 7 of the CCT Act as it was not open for at least 14 days.
As such the Tribunal could not make a costs order based on the
non-acceptance of a non-compliant settlement offer.
The Tribunal confirmed that the proper approach in determining
the issue of costs was to consider the factors listed in Section
71(4) of the CCT Act, these being:
outcome of the proceedings;
conduct of parties to the proceedings;
nature and complexity of the proceedings;
relevant strengths of the claims of each party;
any contravention of an Act by a party; and
anything else the Tribunal considers relevant.
Findings of the Tribunal
The Tribunal placed weight on the fact that in this case, there
was substantive non-compliance with the RV Act. It was also a
significant factor for the Tribunal that Milstern failed to comply
with many aspects of the legislation and took the view that the
applicants' claim was fundamentality stronger than that of
In considering the issue of any contraventions of any
legislative provisions, the Tribunal held:
"Again the evidence is clear that the respondents had
ignored, were not aware of or infringed important and significant
provisions of the Act that were enacted to regulate the retirement
In awarding costs, the Tribunal determined that costs were to be
awarded against Milstern but on a standard basis only on the
District Court scale and not on an indemnity basis.
The message for retirement village operators
Where an operator is found to have been in breach of significant
obligations under the RV Act, such actions will weigh heavily with
the Tribunal in any costs application.
In contesting any applications made by residents, operators
should carefully assess the likelihood of a costs order against
them, particularly where there may have been significant breaches
of the RV Act by the operator.
The Council announced planning policies to encourage more inner suburban retirement village and aged care development.
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