ACE v State of NSW

NCAT Administrative and Equal Opportunity|2015-02-27

The Applicant's submission on Respondent's cost's submissions

The Applicant's submissions addressing the Respondent's cost submissions were set out in a document received at the Tribunal on 1st September 2014 and were supplemented orally at hearing on 8th September 2014.
The Tribunal notes that there was little difference between the parties in relation to the chronology of events.
The Applicant referred to the following additional matters.
The Applicant had provided a report from a psychologist, Ms Louise Morrow, dated 17th of February 2014 to the Respondent which indicated that the Applicant was not currently fit for work but would become fit. The Respondent gave notice of termination of the Applicant's employment on 19th March 2014 on the basis that the Applicant was unfit for work.
The Applicant then complained to the AHRC about the Applicant's termination from work on disability grounds. The Respondent did not consent to conciliation and the AHRC determined to terminate the complaint. It was then open to the Applicant to lodge proceedings in the Federal Circuit Court.
The Tribunal summarises the Applicant's submissions as follows:

Tribunal's consideration of the Respondent's application for costs

The questions before the Tribunal in determining whether or not to award costs to the Respondent were: 1. In terms of section 60 (3), had the Respondent articulated special circumstances which warranted the award of costs to the Respondent? 2. If the Respondent had articulated special circumstances in terms of section 63 of CATA, did such costs include the award of costs for work undertaken in dealing with the complaint at the ADB in terms of section 60 (5).

Were there special circumstances?

Section 60 (3) provides that the Tribunal may have regard to a catalogue of factors - including 60(3) (g) "any other matter that the Tribunal considers relevant." It is clear the factors set out in section 60(3) (a) to (g) are not meant to be exclusive or exhaustive of what might constitute "special circumstances".
A scan of case law shows that the concept of 'special circumstances" is known in the areas of criminal law, professional disciplinary matters in relation to costs, applications for security of costs and in the social security arena concerning beneficial exercise of a discretion.
In Topp's case, the AAT considered the meaning of the term "special circumstances" in relation to its use in section 1184K of the Social Security Act. Section 1184 allowed for the Secretary of the Department of Social Security to exercise a beneficial discretion "if it is appropriate to do so in the special circumstances of the case." Relying on a Full Federal Court decision in Beadle v Director General of Social Security [1984] AATA 176, the AAT considered that if something unfair, unintended or unjust had occurred which was out of the ordinary, (this Tribunal's bolding) this might constitute special circumstances justifying the exercise of the discretion - see Topp and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 99 paragraphs 21 and 38-40.
The AAT's analysis in Topp's case also indicates that the determination of the existence of "special circumstances" vested a broad discretion in the decisonmaker.
Other common features of the case law on special circumstances are consideration of the tenuousness of the case brought by a party and the mode of conduct of the litigation.
Most recently the NCAT Appeals Panel in the matter of Obieta, considered that "special circumstances" in respect of costs in section 60, included the persistent prosecution of a weak (and unsuccessful) case through an appellate process- see Obieta v Australian College of Professionals Pty Ltd [2014] NSWCATAP 38.
The Tribunal has considered the Respondent's submissions on the following factors as to whether there are special circumstances justifying the award of costs against the Applicant:

(i) Did the Applicant unreasonably prolong the time taken to complete the proceedings in terms of section 60(3) (b) of CATA?

The Applicant's complaint was brought in the ADB in October 2013. It had been withdrawn in NCAT by July 2014 - a period of 10 months. In the interim the matter went to a conciliation conference at the ADB; offers of settlement were exchanged; the Applicant had become unwell - allegedly as a result of the workplace relationship and the Applicant's employment was terminated by the Respondent.
The Tribunal interprets the concept of "unreasonableness" in the context and the circumstances of the matter. Ms Morrow's psychological report of February 2014 concludes that the Applicant was not fit for work at that time - but would become so. The Respondent was not obliged to terminate the Applicant's employment when it did. The Tribunal assumes that the Respondent would have been made aware of the potential consequences of terminating the Applicant's employment - including that the Applicant may pursue other legal pathways. The Tribunal does not accept that the sequence of events set out above demonstrates an unreasonable delay by the Applicant in responding to her circumstances.

(ii) Did the Applicant withdraw the proceedings after unreasonably refusing to accept the Calderbank offers? Section 60(3) (g)

This submission by the Respondent requires the Tribunal to draw a conclusion about the relative merits of the Respondent's and Applicant's cases. No pleadings or evidence were filed in the matter. The Tribunal is not in the position to weigh up the strength of the parties' cases in the substantive complaint or the adequacy of the Calderbank offers.
In this regard the Tribunal refers to the comments of Deputy President Hennessy in the matter of Aydemir v Redegalli [2011] NSWADT 198 at paragraph 16: Withdrawal in these circumstances does not constitute a concession that the application lacked merit, nor can such an inference necessarily be drawn. In the absence of a hearing where findings of fact are made and legal argument presented, it is not appropriate for the Tribunal to draw a conclusion as to the merits of the complaint.
The Tribunal is not satisfied that the failure to accept the Calderbank offers constitutes special circumstances.

(iii) Did the Applicant act unreasonably in making a late decision to withdraw the NCAT proceedings in July 2014 and pursue only the AHRC complaint Section 60(3) (g?)

The Tribunal understands the Respondent's submission on this issue to mean that the Applicant ought to have withdrawn her ADB/NCAT proceedings prior to commencing AHRC proceedings in May 2014. The Respondent considered this an abuse of process which the Applicant would have understood as a lawyer, as well as having been legally advised of this.
The Respondent's argument appears to be predicated on the premise that the proceedings in the ADB/NCAT and the AHRC were duplications. However it is clear from reading the complaint to the AHRC, that the matters raised in the AHRC differed to those raised in the ADB. The AHRC complaint form nominates disability discrimination and sex discrimination based on the Respondent's decision to dismiss the Applicant, whereas the ADB/NCAT proceedings dealt with sex and carer's discrimination and victimisation. When the Applicant was dismissed from her employment she could no longer obtain the adjustments to her work conditions sought in her complaint to the ADB. The dismissal of the Applicant also added disability discrimination and victimisation to the potentially unlawfully discriminatory grounds of action. It is clear to the Tribunal that the proceedings in the AHRC covered different events and different alleged grounds of discrimination.
The Tribunal does not find there are special circumstances occasioned by the Applicant's lodgement of a complaint in the ADB in October 2013, the subsequent lodgement of a complaint in the AHRC in May 2014 after the Applicant's employment had been terminated by the Respondent and the Applicant's subsequent request to the President of the ADB to refer the complaint to NCAT in May 2014.

(iv) Did the Applicant act unreasonably in forum shopping and commencing actions in three jurisdictions as a relevant matter under Section 60(3) (g)?

The Tribunal is unable to judge the merits of the lodgement of the complaint in the AHRC nor in the threat or actuality of commencing the workers compensation action. These are matters for determination by those jurisdictions. There was nothing before the Tribunal that suggested that the Applicant had lodged a complaint in the ADB which was lacking in substance in terms of the Anti-Discrimination Act. The President of the ADB could have declined to refer the complaint in such circumstances or the Respondent could have applied to have the complaint dismissed on this basis. This did not occur.
In the circumstances the Tribunal does not find that there are special circumstances which warrant the ordering of costs against the Applicant in relation to the withdrawn complaint. The Respondent's application for costs is dismissed.
Accordingly the Tribunal does not need to determine whether any award of costs ought to include work undertaken by the Respondent in dealing with the ADB proceedings in relation to section 60(5) CATA.

Applicant's submissions in relation to the award of costs against the Respondent and/or its legal representatives

The Applicant sought her costs occasioned by the Respondent's application to the Tribunal for the costs in relation to the complaint in the ADB and after referral to NCAT. The Applicant submitted that there were special circumstances as set out in section 60(3) of CATA.
The Applicant alleged that the Applicant had been disadvantaged as set out in section 60(3) (a) by the late provision of the Respondent's supplementary submissions at 6:47 pm the previous evening when the Respondent's supplementary submissions had been emailed to the Applicant's legal representative.
The Applicant referred to section 60(3) (b), submitting that the Respondent had been responsible for prolonging unreasonably the time taken to complete the proceedings by applying for costs when the Applicant had advised the Respondent she was withdrawing the complaint and application to NCAT on 25th July 2014.
The Applicant referred to section 60(3) (c) which refers to "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," . The Applicant submitted that there was no case law quoted by the Respondent which supported the existence of special circumstances in this matter. Nor was the Tribunal referred to an instance of a Respondent being successful in obtaining costs in relation to ADB "proceedings".
The Applicant submitted that the Respondent had been misleading in its submissions to the Tribunal on the relevant law in 2 respects. First, the Respondent had not drawn the Tribunal's attention to the change from the grounds of "special circumstances" to "fair to do so", back to "special circumstances."
The Respondent had also been misleading in its failure to refer to the words "application to the Tribunal" in defining "proceedings". The Applicant said that the reference to "application to the Tribunal" in the definition of proceedings excluded dealings in the ADB from any costs recovery.
The Applicant further submitted that the Respondent had been misleading to the Tribunal in its submissions on the relevant case law. There had been no cases where costs had been awarded in relation to matters in the ADB or in cases where an Applicant had withdrawn their case. There was no tenable basis in law for the Respondent to be awarded costs of the ADB portion of the matter.
The Applicant submitted that the Respondent's costs application had been frivolous and vexatious, in breach of the considerations set out under section 60(3) (e).
The Applicant referred to section 60 (3) (f) which requires consideration of whether a party has refused or failed to comply with the duty imposed by section 36 (3) set out as follows: (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
The Guiding Principle set out in Section 36 (1) is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. In these respects the Applicant submitted that neither the Respondent nor its representatives had acted to give effect to the guiding principle by focussing on a costs application.
Nor had they participated in the implementation of the Tribunal's practice and procedure as required by Section 36(4) so as to facilitate the resolution of the issues in a way that the cost of the parties in the Tribunal was proportionate to the importance and complexity of the subject matter of the proceedings.
The cost of the costs proceedings significantly exceeded the cost of the substantive proceedings in the Tribunal. The cost of attendance at the NCAT proceedings consisted of only one case conference. It would have been sufficient for one practitioner to attend. The Applicant assessed this as a cost of $200.
By contrast, at the same time, the Applicant had attempted to deal with the issues by correspondence between the parties, rather than relying upon litigation in the Tribunal.

Respondent's Submissions re Applicant's application for costs of the Costs proceedings

The Respondent submitted that there was a distinction to be made between the application of the Guiding Principles set out in section 36 (4), and section 60 which dealt with costs. Matters of reasonableness and proportionality were relevant to the assessment of the amount of costs to be awarded - not whether or not costs should be awarded.
The Respondent said that the question of costs had been a live issue between the parties since November 2013. The Applicant's letter to the ADB dated 21st of November 2013 set out the Applicant's costs to that point as part of a proposed settlement to the ADB. The fact that the Applicant had threatened three sets of proceedings had provided a basis for a costs discussion between the parties.
The Respondent noted that it had taken the Applicant seven months between November 2013 and July 2014 to determine what to do with her complaint made to the ADB and to decide to terminate it. In the interim the Respondent needed to investigate the complaints made by the Applicant taking statements, providing advice to the client, interviewing the relevant witnesses and accruing costs as a result.
In seeking a personal costs order against the Respondent's legal representatives the Applicant had not articulated the prejudice that it had suffered by any alleged actions of the Respondent's legal representative.

Tribunal's consideration of the Applicant's costs application against the Respondent in relation to Respondent's application for costs.

The Tribunal has considered whether or not special circumstances exist warranting a departure from the rule that each party should pay its own costs and an award of costs against the Respondent in relation to its bringing of the costs proceedings. 60 (3) (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,
The Tribunal does not consider that the Respondent has conducted the proceedings in a way that unnecessarily disadvantaged the Applicant to the proceedings. 60(3) (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings
The Applicant submitted that the Respondent had unreasonably prolonged the time taken to complete the proceedings - both the substantive proceedings, as well as the costs proceedings. The Tribunal is satisfied that the bringing of costs proceedings with lengthy written and oral submissions was an unreasonable prolongation of the matter - considering the context. There had been only one case conference in the matter on the 2nd of July 2014. The Applicant had advised the Respondent of its intention to withdraw the matter by 25th July 2014 - some 23 days later and prior to the commencement of the timetable for filing documents. The Tribunal agrees with the Applicant's contention that at this point, the parties' respective costs, as well as the Tribunal's - see section 36 (4) - were restricted. Since that time the parties have filed lengthy submissions and the Tribunal has used 2 part hearing days. The Tribunal considers that this is a disproportionate cost in relation to now withdrawn proceedings. 60 (3)(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,
The Tribunal has considered whether the Respondent's claim for costs had no tenable basis in fact or law. The Tribunal considers that the special circumstances costs provisions are such as to allow the Tribunal a broad discretion to consider individual instances. The Respondent did not provide instances of previous case law which supported the existence of special circumstances in this particular matter.
In Shandil's case the Tribunal did award costs to a Respondent after the Applicant's withdrawal of the case. There are some distinctions to be made however from the current matter. Mr Shandil had agreed to withdraw the complaint. Contrary to that agreement, he had then proceeded with the complaint - then withdrawn it on the day before hearing. Further the test in that matter was not "special circumstances" - but rather where "it is fair to do so".
It is clear however that the potential for an award of ADB costs was left open by Deputy President Hennessy in the matters of both Shandil and Aydemir.
The Respondent's "special circumstances" case was, in the context already set out, tenuous. The Tribunal is not persuaded however that there was "no tenable basis in fact or law" for the Respondent's costs application. 60 (3) (d) the nature and complexity of the proceedings
It is difficult for the Tribunal to judge the nature and complexity inherent in the substantive proceedings as no evidence was filed before the Tribunal. There has been complexity in the costs proceedings, given the arguments in relation to the scope of special circumstances and the contents of a costs order. The written submissions from both parties were substantial and the hearing of the applications conducted over two part hearing days. 60 (3) (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance
The Applicant has submitted that the Respondent's application for costs was frivolous and vexatious. There was insufficient evidence before the Tribunal provided by the Applicant to support this contention. The Tribunal does not consider that special circumstances have been demonstrated in this regard. 60 (3) (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3),
The Tribunal has considered the interaction between the objects of the CATA as set out in section 3; the guiding principles set out in section 36 and the special circumstances factors set out in section 60 dealing with costs. As has been set out, the Tribunal is concerned that despite the fact that the Applicant's application was withdrawn on 13th August 2014 with prior notice to the Respondent, that the matter has now been prolonged. While the Tribunal has not concluded that the application had no tenable basis in fact or law, it was tenuous.
On the face of both Rae's case and Hendrickson's case, the Respondent would have known there was a risk inherent in seeking costs in the matter.
Echoing the words of Deputy President O'Connor in awarding costs against an Appellant in Obieta's case - the Respondent's case for costs was a weak one.
The intent of the CATA as set out in section 36 and 60 is that parties should conduct themselves so as to ensure that the Tribunal operates in a just, quick and cheap context, with costs proportionate to the importance and subject-matter of the proceedings. The bringing of this costs application by the Respondent in respect of the withdrawn application is not consistent with this aim.
There was no specific evidence before the Tribunal in relation to the role of the Respondent's legal representatives in any breach of section 36(3). The Tribunal makes no finding against the Respondent's legal representatives in this regard.

60(3) (g) any other matter that the Tribunal considers relevant.

The Tribunal is also satisfied that application of the rule set out in section 60(1) that each party should pay its own costs in respect of the Respondent's unsuccessful application for costs would bring about an unfair result in respect of the Applicant. This unfair result constitutes special circumstances in terms of section 60(3) of CATA.

Decision

In the circumstances, the Tribunal is persuaded that special circumstances exist such that the Applicant ought to be awarded costs occasioned by responding to the Respondent's application for costs.
No costs assessments were put to the Tribunal. In accordance with section 60(4) of CATA, the Tribunal considers that the Applicant's costs would include the costs of the Applicant's solicitor's costs for preparation of a response to the Respondent's application for costs; their settlement by junior counsel and the two part days of hearing requiring representation by junior counsel.
The Tribunal directs that 1. The Applicant file and serve a calculation of costs in this regard within 14 days of the date of this decision; and 2. The Respondent is to file and serve any response to this calculation within 14 days of its filing. 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 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 February 2015

Costs provisions section 60 CATA

The relevant provisions dealing with the awarding of costs are set out in section 60 of the CATA. The general rule is that each party to proceedings is to bear their own costs: CATA s 60(1). Costs may only be awarded if the Tribunal is satisfied that there are special circumstances warranting the award of costs: CATA s 60(2) - having regard to the matters set out in s 60(3) (a)-(g) of CATA. Section 60 also defines the term "costs" and gives the Tribunal power to determine by whom and to what extent costs are to be paid.
The provisions of this section are similar, though not identical, to the provisions of section 88 of the CATA's predecessor, the Administrative Decisions Tribunal Act (ADTA). The default position in each section is that each party pays its own costs. A significant difference between the sections is that the test for the award of costs in section 88 was where it was "fair to do so," while the new section 60 requires "special circumstances".
Section 60 is set out below with the Tribunal's bolding of significant phrases and clauses. 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 Division 11 of Part 3.2 of the Legal Profession Act 2004 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.
The Tribunal notes that section 88 of the ADTA previously nominated "special circumstances" as the basis for the award of costs. This later changed in 2009 to a test of where it was "fair to do so". The new and current costs section 60 CATA, again picks up the wording of "special circumstances" as the basis for the award of costs. The Tribunal notes that in the matter of AT v Commissioner of Police 2010 NSWCA 131, Basten J remarked that the test of what is fair, is a low bar. In the matter of Obieta v Australian College of Professionals Pty Ltd [2014] NSWCATAP 38 in dealing with a costs application under section 60 of CATA, the Deputy President of NCAT O'Connor noted at paragraph 78: 78. The exception ('special circumstances') is, arguably, narrower than the exception at s 88(1A) of the ADT Act ('fair to do so').
This Tribunal infers that the test of "special circumstances" is a harder test for its proponent to satisfy than the previous where "it is fair to do so".

Principles underpinning the Respondent's application

The Respondent submitted that section 60 of the CATA is similar to section 88 of the ADTA. Decisions made under the previous legislation were relevant in determining matters in respect to section 60 of the CATA. Section 39 of CATA defines an application as including a complaint. Accordingly the Respondent sought costs incurred by the Respondent in responding to the complaint at the ADB and at NCAT. The Respondent noted that costs have been awarded in the past where an Applicant had withdrawn from the proceedings - just as the Applicant had done in these circumstances. See Shandil v Animal Welfare League NSW [2013] NSWADT 15.
The Respondent acknowledged that there was a public interest objective against the awarding of costs which may discourage people from airing their grievances in the equal opportunity jurisdiction. This was reinforced by the primary rule set out in section 60 whereby each party pays its own costs. However the purpose of cost orders are to help ensure that parties conduct their cases in such a way that costs are not unnecessarily incurred or forced on others - see Hendrickson v Yarra Bay 16 ft Skiff Sailing Club Ltd (No 2) [2011] NSWADT 204
There were special circumstances because the history set out established that the Applicant had prolonged unreasonably the time taken to complete the proceedings (s60 (3) (b)), and there were other relevant considerations for the Tribunal (s 60(3) (g)).
These relevant considerations included that the Applicant had withdrawn the proceedings after unreasonably refusing to accept the Calderbank offers. The Respondent considered that the Applicant unreasonably rejected the three Calderbank offers, resulting in unnecessary commencement of the proceedings, and the delay in the complaint as described in the Respondent's chronology. Had the Applicant accepted any of the three Calderbank offers, she would have been better off than she was by withdrawing the proceedings; the Respondent would not have expended the costs and the proceedings would have been resolved earlier.
The Respondent submitted that it is in the public interest that the Tribunal discourage Applicants from unreasonably rejecting offers of compromise, and also from conducting their cases in several jurisdictions in a manner that results in the unnecessary incurring of costs.
Further, the Applicant's withdrawal of the proceedings because she is pursuing proceedings in another jurisdiction is unreasonable. The Applicant's lodging of a complaint in the AHRC in May 2014 had led to a delay between February 2014 and May 2014 in the Applicant seeking referral of the ADB complaint to NCAT. The Respondent considered that the Applicant would have been aware as she is a solicitor, of the necessity to prepare the multiple cases and the costs inherent in this.

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