Andrew Kennedy Funeral Directors Pty Ltd v Commissioner of Fair Trading

Background

1. In November 2019, the Applicant made an application to this Tribunal for an administrative review under the Administrative Decisions Review Act 1997 ("the ADR Act"). The Applicant sought review of a decision by the Respondent in regard to an access application under the Government Information (Public Access) Act 2009 ("the GIPA Act"). The Respondent's decision was to refuse access to the rate of remuneration that the Respondent agreed to pay Mr Ian Purchas as an administrator of a fund in which the Applicant has an interest.
2. The requested information was ultimately released in March 2020
3. The Applicant submits that there was never any basis, or any reasonably arguable basis for the Respondent to refuse to disclose Mr Purchas' rate of remuneration and that there are special circumstances within the meaning of section 60 (3) of the NCAT Act which warrant the making of a costs order in the Applicant's favour.

Determination without a hearing

1. Section 50 of the NCAT Act provides that 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.
2. In this case both parties have indicated their agreement to the application being determined on the papers. Having reviewed all the materials I am satisfied that this is matter than can be adequately determined in the absence of the parties, by considering the materials lodged by them. I therefore dispense with a hearing.

Issue for determination

1. The issues for determination are whether there are special circumstances which warrant an award for costs in the Applicant's favour and if so, whether an order should be made.

Section 60 of NCAT Act

1. Section 60 of the NCAT Act provides that each party to proceedings in the Tribunal shall pay their own costs. However, the Tribunal may award costs only after it is satisfied that there are special circumstances warranting an award of costs.
2. For the purposes of section 60 'costs' includes the costs of, or incidental to, proceedings in the Tribunal, and 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: sub-section 60(5).
3. Sub-section 60(3) sets out factors that the Tribunal may take into account when determining whether to award costs. The Tribunal may also determine by whom costs are to be paid and to what extent they are to be paid and may also order that costs be assessed.
4. Subsection 60(3) of the NCAT Act is in the following terms: (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.

"special circumstances"

1. The phrase "special circumstances" has consistently been held to constitute circumstances that are out of the ordinary but need not be extraordinary or exceptional. In Cripps and Another v G & M Dawson Pty Ltd and Another; G & M Dawson Pty Ltd and Another v Cripps and Another [2006] NSWCA 81, the NSW Court of Appeal considered an appeal from the Administrative Decisions Tribunal's Appeal Panel. The appeal was concerned, inter alia, with section 88 of the former Administrative Decisions Tribunal Act 1997, a predecessor to section 60, and the meaning of the phrase "special circumstances". At paragraph [60] Santow JA (Mason P and Brownie AJA) said: ...it suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional. While a finding of "serious unfairness" is not prerequisite to determining that there are special circumstances, it is nonetheless a highly relevant consideration.
2. In CEU v University of Technology Sydney [2017] NSWCATAD 280, the Tribunal stated: As the section makes plain, costs in the Tribunal do not follow the event. To justify an order for costs, an applicant must first satisfy the Tribunal that there are 'special circumstances' warranting it. To establish special circumstances, 'it suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional': Gaynor v Burns [2015] NSWCATAP 150 (overturned on different grounds in Burns v Corbett; Gaynor v Burns [2017] NSWCA 3, but remaining a useful guide to the section); Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11].
3. If the Tribunal is satisfied that special circumstances exist, it has discretion to award costs. It is not obliged to do so. The fact that some factors are made out does not necessarily mean that a costs order should be made. As the Appeal Panel observed in eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at paragraph [48] [T]he discretion to award costs must be exercised judicially and having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs. Each situation must, of course, be assessed on a case by case basis to see whether or not special circumstances exist so as to warrant the award of costs
4. In Cominos v Di Rico (No 2) [2016] NSWCATAP 138 the Appeal panel noted at paragraphs [63] - [64]: The principle … that "Costs are not intended to penalize an unsuccessful party" appears to be derived from authorities such as Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [67] and Sze Tu v Lowe (No 2) [2015] NSWCA 91. In Sze Tu it was held (at [37]): [37] Costs are not awarded by way of punishment of the unsuccessful party but, rather, "are compensatory in the sense that they are awarded to indemnify to successful party against the expense to which he or she has been put by reason of the legal proceedings": Latoudis v Casey [1990] HCA 59; 170 CLR 534 at 543 (Mason CJ); Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [67]; Mahenthirarasa v State Rail Authority of NSW (No 2) [2008] NSWCA 201; 72 NSWLR 273 (Mahenthirarasa (No 2)) at [8] (Basten JA; Giles and Bell JJA agreeing). It follows that the inquiry as to what costs order should be made is primarily directed to the position of the successful party: Latoudis v Casey at 542; Mahenthirarasa (No 2) at [9]. … "the test of whether or not an order for costs should be made against an unsuccessful plaintiff or defendant is not whether he or she had done anything to warrant punishment. It is whether, in the circumstances, the defendant or respondent should be compensated."

The Applicant's case

1. The Applicant has provided an outline of the background to the access application and a chronology of events leading up to the application for costs. It submits that there are sufficient special circumstances within the meaning of section 60(3)(b) - (d), (f) and (g) of the NCAT Act to warrant the Tribunal making an order that the Respondent pay its costs of the proceedings.
2. The Applicant asserts that as at 15 April 2020 its costs since commencement of the proceedings are $49,753.06, made up of $33,878.96 in billed fees and $7,700 for counsel's fees, plus further unbilled costs in the amount of $8,174.10. Costs are ongoing.

Unreasonably prolonging the proceedings

1. The Applicant submits that the Respondent has been responsible for prolonging unreasonably the time taken to complete the proceedings: subsection 60(3)(b) of the NCAT Act. It says that the Respondent did so by reversing its position months after the initial case conference, and only after putting the Applicant to considerable expense.
2. It is the Applicant's position that it should never have been put to the time, inconvenience or expense of having to commence these proceedings. However having been required to commence proceedings, the Respondent further contributed to the time, inconvenience and cost to the Applicant due to how it conducted itself in the proceedings. The Applicant submits that as a consequence of the approach taken by the Respondent it was put to considerable expense, including issuing a summons to the Respondent to produce documents, briefing counsel and preparing evidence and submissions.
3. The Applicant contends that its evidence and submissions did not contain any information that was not already known to the Respondent, or which ought to have been known to the Respondent. Following service of the Applicant's evidence and submissions, the Respondent failed to comply with the Tribunal's timetable and did not communicate its position until the Applicant's solicitors followed up with it in relation to the its failure. The Respondent provided no explanation for its failure to comply with the timetable, or for its change of position.

Whether the Respondent's decision was tenable in fact or law

1. The Applicant contends that the Respondent had no basis, or no tenable basis for its decision: subsection 60(3)(c) of the NCAT Act. It says that the relative strength of the claims made by the parties was always heavily weighted in favour the Applicant and those strengths were clearly communicated to the Respondent on a number of occasions from the outset. It submitted that there was never any real or likely prospect of the Respondent successfully resisting the disclosure of the information. The withheld information was the remuneration rate of a public officeholder and trustee in circumstances where the rate was fixed by the Respondent under statute and was, in any event, seven years old.
2. The Applicant submits that the Respondent has conceded this point, but it did not make the concession until March 2020.
3. The Applicant submits that the Respondent accepted that there were strong public interest considerations in favour of disclosure of the information. It was required to disclose the information sought unless it was able to establish both the existence of public interest considerations against disclosure and that those considerations outweigh the many public interest considerations in favour of disclosure.

Matters personal to the Applicant

1. The Applicant submits that, pursuant to section 56 of the GIPA Act, personal factors of the Applicant and the application should have been taken into account in considering the public interest test. The Applicant contends that these factors operated positively in conjunction with other factors in favour of the release of the information.
2. The Applicant says that its primary concern was the substantial deterioration of the fund during the period for which Mr Purchas held office as administrator and trustee. The fund comprises money paid by purchasers of funeral services and is trust money. The Applicant wished to ascertain whether, in the circumstances, the Respondent acted in the best interests of the funeral fund parties in appointing Mr Purchas to undertake the work that he did.
3. The Applicant says that even when looking objectively at the circumstances which would favour non-disclosure, a decision not to release the information in this matter was untenable.

Clauses 4(b) and 4(d) of the Table to section 14

1. For clauses 4(b) and 4(d) the Respondent needed to establish that disclosure of the information could reasonably be expected to reveal commercial-in-confidence provisions of a government contract (clause 4(b)), or prejudice Mr Purchas' legitimate business, commercial, professional or financial interests (clause 4(d)).
2. The term "government contract" is defined in clause 1 Schedule 4 of the GIPA Act as: "government contract" means any of the following contracts between an agency and a private sector entity-- (a) a contract under which a party agrees to undertake a specific project (such as a construction, infrastructure or property development project), (b) a contract under which a party agrees to provide specific goods or services (such as information technology services), other than a contract of employment, (c) a contract under which a party agrees to transfer real property to another party to the contract, (d) a lease of real property.
3. The Applicant says that clause 4(b) of the Table to section 14 of the GIPA Act was never enlivened. It did not seek information contained in a "government contract" and there was no evidence that disclosure of Mr Purchas' remuneration would reveal commercial-in-confidence provisions of a government contract.
4. In relation to clause 4(d), the Respondent bears the burden of establishing that disclosure of the information could reasonably be expected to prejudice Mr Purchas' legitimate interests.
5. The Applicant says that it is not enough that disclosure of the information sought could reasonably be expected to disclose information about Mr Purchas' legitimate business, commercial, professional or financial interests. The Respondent needed to be satisfied that disclosure of the information could reasonably be expected to "prejudice" those interests. As the requested information is seven years old and there has been considerable economic change in the interim, nothing could be inferred about current rates from the information.
6. The Applicant submits that the Respondent simply did not have a basis to withhold the rate of remuneration paid to Mr Purchas at any stage since the initial GIPA application.

Nature and Complexity

1. The Applicant contends that there was nothing complex about the Applicant's request: subsection 60(3)(d) of the NCAT Act. It says that the information sought was confined, simple and seven years old. As such, the Respondent's final position should have been able to be determined with minimal time and expense right at the outset. It did not require any laborious or complicated legal analysis to be undertaken.

Just, Quick and Cheap Resolution of the Real Issues in Proceedings

1. The Applicant contends that the Respondent refused or failed to comply with the obligation imposed by section 36(3) of the NCAT Act which promotes the just, quick and cheap resolution of the real issues in proceedings: section 60(3)(f) of the NCAT Act.

Other relevant circumstances

1. The Applicant submits that the Tribunal can take account of the factual and procedural background, as well as the statutory framework and the public law considerations in regard to the consideration of whether there are special circumstances which warrant a costs order in the Applicant's favour: section 60(3)(g) of the NCAT Act.
2. The Applicant also notes that it made a without prejudice offer to the Respondent in regard to costs and that the Respondent failed to respond to the offer. The Applicant brought this application for costs and has incurred further costs as a result.
3. In response to the Respondent's submissions the Applicant submits that it is in the public interest that government departments be held accountable for costs that are unnecessarily incurred by applicants as a result of the department's conduct. If costs are not awarded in appropriate circumstances there will be no incentive for government departments to properly consider and discharge their obligation not to refuse access to information without any reasonable basis for doing so. There should be costs consequences for the Respondent for continuing to maintain an untenable position after these proceedings were commenced. The Applicant says that the Respondent has not pointed to any new evidence or arguments in its submissions to explain why it reversed its decision so late in the day. The Applicant says that as the Respondent has failed to offer any explanation for its late change in position, the Tribunal should infer that the Respondent never had any basis, or any reasonably tenable basis for withholding the information. By maintaining its position it caused the Applicant to incur significant costs.
4. The Applicant submits that the fact that the Information Commissioner also came to the same erroneous conclusion in respect of clause 4(d) of the Table to section 14 of the GIPA Act does not justify or excuse the Respondent's conduct.
5. The Applicant submits that the Respondent's conduct in refusing to disclose information that it had no basis for refusing, and continuing to do so right up until March 2020 without any explanation for its change in position and after the Applicant had incurred significant costs and delay, was unreasonable conduct and conduct that is out of the ordinary. It says that the Respondent's conduct amounts to extraordinary circumstances which warrant a costs order being made in the Applicant's favour.

The Respondent's case

1. The Respondent disputes that any order that it pay the Applicant's costs of the proceedings is warranted and submits that the application for costs should be dismissed.

The Respondent had acted reasonably

1. The Respondent contends that it had acted reasonably for the just, quick and cheap resolution of this matter. It provided a chronology of relevant events showing that after the application to the Tribunal was commenced on 25 November 2019 the matter progressed to a case conference on 19 December 2019. The timetable that was set at the case conference required the Applicant to file and serve its material first and for the Respondent to lodge its material 28 days from receipt of the Applicant's material. The time for the Applicant to file and serve its material was ultimately set at 6 February 2020. The 28-day period for lodgement of the Respondent's material was therefore to have been 5 March 2020.
2. On 2 March 2020 the Respondent notified the Applicant that it had reconsidered the decision and would disclose Mr Purchas' rate of remuneration within 14 days in the absence of Mr Purchas making an application to the Tribunal to resist the disclosure.
3. The Respondent released the withheld information on 19 March 2020.
4. The Respondent submits that chronology of events shows that it acted reasonably and saved both parties from incurring further costs in relation to the review and provision of further material and the conduct of a lengthy hearing.

The decision was justified under clause 4(d)

1. The Respondent submits that the decision to withhold the information was justified under clause 4(d) of the Table to section 14 of the GIPA Act. It also points to the view expressed by the Information Commissioner the Respondent's decision was justified under clause 4(d) and that she made no recommendations to the Respondent. The Information Commissioner was satisfied that the public interest consideration against disclosure under clause 4(d) outweighed the public interest considerations in favour of disclosure of the information.
2. The Respondent says that it indicated at the case conference on 19 December 2019 that it would rely on this clause 4(d) and also on clause 4(b) subject to provision of material to substantiate this ground. It says that the conclusion made by the Information Commissioner supported the Respondent's refusal to provide access to the information. It submits that the reconsideration of its decision and the eventually release of the information is not a special circumstance warranting an award of costs.
3. The Respondent says that, in accordance with the provisions of the GIPA Act it has every right to resist an application for release of the information and that a change in position after consideration of the Applicant's material does not constitute a special circumstance. Rather, it is consistent with the principle in 'no cost' jurisdictions that merely losing or winning will not affect the primary position in respect of costs.
4. Further, the Respondent submits that the amounts of costs sought by the Applicant are exorbitant and disproportionate to the matters raised in these proceedings.

Discussion

1. Section 60 of the NCAT Act provides that each party to proceedings in the Tribunal shall pay their own costs. However, the Tribunal may award costs if it is satisfied that there are special circumstances warranting an award of costs. In this matter the Applicant asserts that the Respondent has engaged in conduct which constitutes special circumstance for the purposes of section 60.
2. The Applicant contends that the Respondent continued to maintain an untenable position after these proceedings were commenced and then reversed its position without offering any explanation for its change in position, and that this conduct constitutes special circumstance for the purposes of section 60.
3. I do not agree.
4. I accept that the Respondent's case was not strong but I do not accept that it had no tenable basis for asserting that its decision to withhold the requested information was the correct decision. As noted, the Information Commissioner supported the Respondent's refusal to provide access to the information.
5. The Respondent has obligations as a "model litigant" and is expected to adhere to standards of fair dealing in the conduct of litigation.
6. As the chronology has indicated, the application to the Tribunal was commenced in late November 2019. The matter came before the Tribunal for a case conference on 19 December 2019. The Applicant served its material on the Respondent in early February 2020 and the Respondent reversed its position when it had considered the Applicant's material.
7. In my view, the chronology does not support the Applicant's contention that the Respondent has been responsible for prolonging the time taken to complete the proceedings. It has complied with the procedures designed to secure the fair and orderly preparation of the matter for hearing.
8. Costs are not awarded by way of punishment of the unsuccessful party. The test of whether or not an order for costs should be made against the Respondent is not whether it has done anything to warrant punishment.
9. It is not out of the ordinary for an agency to change its position in the course of review proceedings commenced under the GIPA Act. The time that it took to consider the material that the Applicant filed in February 2020 was reasonable. In my view it was reasonable for the Respondent to change its position after it had had the opportunity to consider that material.
10. I do not accept that the Respondent has engaged in conduct which resulted in the Applicant incurring unnecessary cost of preparing for the hearing. In my view, in the circumstances of this matter, there are no special circumstances which would result in an award of costs. Even if I am wrong on that assessment and special circumstances do in fact exist, there is discretion with respect to whether to award costs. In my view, the discretion should not be exercised to award costs in this matter.
11. This is clearly a less than ideal situation from the Applicants' perspective but it is not completely at odds with the objects of the GIPA Act.
12. In the circumstances I do not need to consider the Respondent's submission that the amount of costs sought by the Applicant is exorbitant and disproportionate to the matters raised in these proceedings.

Order 1. The application for costs is dismissed.

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: 03 August 2020