ANZ Banking Group Ltd v Chief Commissioner of State Revenue [2005] NSWSC 1355 | Case summary

(c) the defendant pay the plaintiff's remaining costs on a party/party basis. 2 The defendant opposes the orders for indemnity costs. It accepts that the plaintiff is entitled to an order for its costs of the proceedings on a party/party basis. 3 On 12 August 2003, Barrett J gave judgment in ISPT Nominees Pty Ltd v Chief Commissioner of State Revenue [2003] NSWSC 697, (reported in [2003] ATC 4697 and in part at 59 NSWLR 196). His Honour held that the Chief Commissioner's power of delegation under s 8B of the Stamp Duties Act 1920 did not survive the repeal of that Act on 1 July 1998. 4 These proceedings were listed for hearing on 16 February 2004 before Brownie AJ. On the morning of the hearing, counsel for the defendant informed the Court that an issue had been discovered that morning arising from the decision in ISPT Nominees Pty Ltd v Chief Commissioner of State Revenue concerning the repeal of s 8B of the Stamp Duties Act. Counsel for the defendant said that it had been noticed that the certificates in question had been issued by the Commissioner of State Revenue, rather than the Chief Commissioner of State Revenue, which gave rise to the problem of an invalid delegation. Counsel submitted that on the basis of the decision in ISPT Nominees Pty Ltd v Chief Commissioner of State Revenue the certificates upon which the plaintiff relied were invalid. Brownie AJ adjourned the proceedings and ordered that the defendant pay the plaintiff's costs thrown away by reason of the adjournment. 5 The certificates in question were signed by a Mr Robert McGarn "for the Commissioner of State Revenue". On 9 November 2004, on a "without prejudice except as to costs" basis, the plaintiff provided to the defendant, an opinion of Mr Dennis Rose QC in relation to the validity of the certificates. Mr Rose QC advised, in substance, that if Mr McGarn had express or implied authority to issue the certificates on behalf of the Chief Commissioner, the certificates were valid, notwithstanding the lack of a relevant delegation by the Chief Commissioner. Moreover, there was a presumption of regularity to the effect that Mr McGarn had express or implied authority to issue the certificates on behalf of the Chief Commissioner. 6 On 9 December 2004, the defendant advised that as a consequence of the decision of Barrett J in ISPT Nominees Pty Ltd v Chief Commissioner of State Revenue, the Chief Commissioner maintained that the certificates were invalid and "for the purposes of the hearing, the Chief Commissioner will take the role of contradictor in respect of the issue of agency". 7 On 10 February 2005, the plaintiff served a notice to admit facts intended to establish the authority of Mr McGarn to issue the certificates. Some facts were admitted, some were not admitted and some were denied. On 15 February 2005, the defendant served a supplementary outline of argument. He submitted that: "it appears to follow from the decision of this court in ISPT Nominees Pty Ltd v CCSR (2003) ATC 4697 that those s 98U certificates, issued by a delegate of the Chief Commissioner … are of no effect. According to the Court, the written delegation … ceased to have effect immediately prior to 1 July 1998 in consequence of which notices issued by an officer in reliance on that written delegation were therefore not duly issued and were of no effect …". 8 On or about 24 February 2005, the plaintiff served a response to the defendant's supplementary outline of argument. The plaintiff submitted that the defendant was seeking to rely on his own wrong, namely his failure properly to delegate the relevant power, in order to defeat the plaintiff's claim. It submitted that the decision in ISPT Nominees Pty Ltd v Chief Commissioner of State Revenue was wrong on the delegation point. It also submitted that even if there were no valid delegation to Mr McGarn to issue the s 98U certificates, he had express or implied authority to consider the applications for the certificates on behalf of the defendant, to be satisfied of the relevant matters, and to issue the certificates on behalf of the defendant. The plaintiff referred to the authorities concerning the distinction between the exercise of a statutory power as a delegate and as an agent. The plaintiff also relied upon the presumption of regularity. 9 On 25 February 2005, the plaintiff served a notice to produce on the defendant and requested that the defendant and Commissioner of State Revenue be available for cross-examination. It invited the defendant to reconsider his response to the notice to admit facts and particularly to reconsider whether he was able to make further admissions after making reasonable enquiries. 10 On 2 March 2005, the defendant informed the plaintiff he would no longer press the delegation issue at the hearing on 8 March 2005. Accordingly, there was no issue at the hearing before me as to the validity of the certificates. 11 It is clear that the "delegation point", which only occurred to the defendant or his legal representatives on the morning of the hearing of 16 February 2004, was not a decisive point on the validity of the certificates. Had it been considered and raised earlier, the adjournment of 16 February 2004 may have been unnecessary. The point may not have been persisted in, for whatever reasons ultimately persuaded the defendant not to pursue the point. 12 Once the point was appreciated on 16 February 2004, the defendant cannot be criticised for having raised it, even though this necessitated the adjournment. If the case were between two private parties, the mere taking of the point would be unmeritorious. However, the Chief Commissioner has a duty to protect the State's revenue and it is entirely understandable that he should conclude that, the issue having been raised, he was bound to take the point. 13 The argument that the certificates were in any event valid on the ground that Mr McGarn had express or implied authority to issue the certificates on behalf of the Chief Commissioner, and that in the absence of contrary evidence it would be presumed that he had such authority, was first put to the defendant on or about 9 November 2004. It is clear from the Crown Solicitor's letter of 6 December 2004 that the defendant did not, at that stage, accept that Mr McGarn had such express or implied authority to issue the certificate on behalf of the defendant. Of course there has been no trial of that question. I accept the defendant's submission that the issue was not so clear that it could be seen that the plaintiff was bound to succeed on it. At the relevant time, Mr McGarn was a lower ranking officer in the Stamp Duties office: below that of manager, chief assessor and senior assessor. Further, the defendant was not aware of any officer of the Office of State Revenue who at any time before 1 July 2001 issued a s 98U certificate without being a relevant delegate described in an instrument of delegation. The fact that the defendant ultimately did not press the issue, does not indicate that the point was hopeless, let alone that the defendant should have realised it was hopeless. Although it would have been preferable for the defendant to have abandoned the point earlier than he did, I do not think the parties should be discouraged from abandoning issues and thus narrowing the issues for trial. 14 The jurisdiction of the court to order indemnity costs in circumstances such as the present arises where there is some relevant delinquency on the part of the unsuccessful party. (Oshlack v Richmond River Council (1998) 193 CLR 72 at 89). The principles were considered by Campbell J in Hypec Electronics Pty Ltd (in liq) v Mead (2004) 61 NSWLR 169 at [40]-[46]. His Honour's statement of the relevant principles was accepted in the Court of Appeal, although the Court differed from the primary judge on their application; (Mead v Watson (2005) 23 ACLC 718). I do not consider that the conduct of the defendant, after the issue was raised on 16 February 2004, raises any special or unusual feature in the conduct of litigation, or involved a relevant delinquency. It is certainly not unusual for a party, having raised an issue, ultimately to abandon it. As I have said, this is not a case in which I could conclude that the issue raised was hopeless from the beginning. 15 The only feature of the case which in my view might justify an order for indemnity costs is that the delegation point was not raised until the morning of the hearing before Brownie AJ. The point was available to the defendant from the time Barrett J gave judgment in August 2003. The validity of the exercise of delegated powers after 1 July 1998 must have been an issue with which the defendant was then well acquainted. However, Brownie AJ dealt with the costs order which should be made in consequence of the adjournment. His Honour ordered that the defendant pay the plaintiff's costs thrown away by reason of the adjournment. It does not appear from his Honour's judgment that an application was made for indemnity costs. Nonetheless, it was open to the plaintiff to apply for indemnity costs at that time on the ground of the lateness at which the point was raised. 16 It does not appear that the order made by Brownie AJ of 16 February 2004 was entered in accordance with the rules then in force. His Honour's orders are now recorded in the Court's computerised court record system and are taken to have been entered under r 36.11(2) of the Uniform Civil Procedure Rules. It was not submitted that his Honour's order for costs was interlocutory. In those circumstances, the Court does not have power to vary the order in so far as it determines any claim for relief. (Rule 36.16(3)(a)). As part of its claims for relief, the plaintiff sought costs. By his order of 16 February 2004, Brownie AJ determined the plaintiff's entitlement to that relief so far as they concerned the costs thrown away by the adjournment. I do not consider that I have the power to vary the order for costs made on 16 February 2004. Even if I had that power, it seems to me that I should not exercise it. The ground upon which indemnity costs might be ordered essentially depends upon the lateness at which the point was raised. That was a matter which could have been raised before Brownie AJ. It would not necessarily lead to an indemnity costs order. I do not think sufficient reason has been shown to vary his Honour's order as to costs, even if I had power to do so. 17 For these reasons, I refuse the plaintiff's application for indemnity costs. Although the issue of costs was argued separately on written submissions, it was but one of a number of issues raised during the proceedings. I do not consider that the defendant's success on the issue of indemnity costs should mean that a separate costs order be made in relation to that issue. 18 In my view, the appropriate costs order is that the defendant pay the plaintiff's costs of the proceedings. I so order.

ANZ Banking Group Ltd v Chief Commissioner of State Revenue

At a glance

Court

Decision date

Before

Source

Judgment (14 paragraphs)

Parties

Cases Cited (3)