Barsoum v Chief Commissioner of State Revenue

Issues

1. The issue for determination by the Tribunal is the Chief Commissioner's costs application.

Determination on the papers

1. Pursuant to s 50 of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act) hearings are required for Tribunal proceedings, subject to exceptions outlined in that section. Generally, hearings are open to the public unless the Tribunal orders otherwise, s 49 CAT Act. One of the exceptions provided by s 50 is that the Tribunal may dispense with a hearing if it is satisfied that the relevant issues can be adequately determined in the absence of the parties by considering any written material provided to the Tribunal and the Tribunal has afforded the parties an opportunity to make submissions about the proposed order and taken any such submissions into account.
2. In Order 2 in the Substantive Reasons, the Tribunal provided an opportunity for the parties to make submissions as to why the Tribunal should not determine the question of costs without an oral hearing. The Chief Commissioner submitted that a determination without an oral hearing was appropriate subject to Mr Barsoum not disputing the contents of paragraphs [6] to [9] in the McKee Affidavit. Mr Barsoum's submissions made no express reference to the McKee Affidavit nor any relevant reference to paragraphs [6] to [9] thereof, nor any reference to the costs application being determined without a hearing.
3. I am satisfied that the issues can be adequately determined by the Tribunal in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Tribunal. Accordingly, pursuant to s 50(2), I order that the Chief Commissioner's costs application be determined without a hearing, that is, the issues be determined "on the papers".
4. All references in these reasons to legislative provisions are to the CAT Act unless stated to the contrary.

The Tribunal's power to award costs

1. "Costs" are defined in s 60(5) to include the costs of, or incidental to, proceedings in the Tribunal.
2. Section 60(1) provides that each party to proceedings pays their own costs. However, s 60(2) states the Tribunal may award costs providing the Tribunal is satisfied that special circumstances exist which warrant such an award. References in these reasons to "special circumstances" are to special circumstances for the purpose of s 60.
3. The term "special circumstances" is not defined in s 60 or elsewhere. However, s 60(3) provides that, in determining whether there are special circumstances which warrant a costs award, the Tribunal may have regard to the matters set out in paragraphs (a) to (f) of s 60(3) as well as "any other matter that the Tribunal considers relevant", s 60(3)(g)
4. In the 29 September 2020 decision in The Owners - Strata Plan No 55773 v Roden (Costs) [2020] NSWCATAP 197 (Roden's case) the Appeal Panel of this Tribunal, presided over by the Tribunal's President, the Honourable Justice Lea Armstrong, a Justice of the Supreme Court of NSW, held at [46] in relation to a costs application concerning Tribunal proceedings at first instance: Having found the Proceedings were complex and that "special circumstances" exist to warrant an award of costs, the Tribunal has a general discretion in respect of costs. In these circumstances costs are compensatory and the starting position is that costs should follow the event.
5. Section 60(4) states that if the Tribunal does award costs, it may determine by whom and to what extent costs are to be paid, and order costs to be assessed in accordance with legal costs legislation pursuant to the Legal Profession Uniform Law Application Act 2004 (NSW) or on any other basis.
6. In Ceepee Pty Ltd v Roads and Maritime Services [2015] NSWCATAD 130 Montgomery SM said: 10 Where a court or a tribunal is conferred with the discretion to award costs, such discretion must be exercised judicially and not capriciously (Oshlack v Richmond River City Council (1998) 193 CLR 72 at 81). The fundamental rationale for the awarding of costs is that such an award is compensatory, not punitive: Latoudis v Casey (1990) 170 CLR 534 at 543; Oshlack v Richmond River Council (1998) 193 CLR 72 at 97.
7. There is no dispute between the parties as to the above principles enunciated by Montgomery SM.
8. The applicant for costs bears the onus of establishing an entitlement to costs in a jurisdiction where the primary rule is that each party bears their own costs: Kurmond Homes Pty Ltd v Spiteri [2015] NSWCATAP 48 at paragraph [18].

Special circumstances

1. In A J Holdings (NSW) Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 143, (AJ Holdings) Sorensen SM said: 15 … For the purposes of s 60(2), "special circumstances" are circumstances surrounding the conduct of the case that are out of the ordinary, but without having to be extraordinary or exceptional: Megerditchian at [11], Spiteri at [54], [60], eMove at [48], B & L Linings at [56-69], CPD Holdings Pty Ltd (t/as Bathroom Exchange) v Baguley [2015] NSWCATAP 21 (CPD) at [24], [29], [30], [32]. It seems the core of the idea of "special circumstances" is that there is something unusual or different to take the matter out of the ordinary course: Fitzpatrick Investments at [19].
2. In Lin v Chief Commissioner of State Revenue [2018] NSWCATAD 98, a costs application by the Chief Commissioner in relation to a failed taxpayers' application concerning a land tax assessment, I said: 10 The … description of "special circumstances" has been applied in numerous cases including those referred to in AJ Holdings at [15], in Redmadi Pty Ltd v Chief Commissioner of State Revenue [2017] NSWCATAD 231 at [137], and in Fitzpatrick Investments at [17] and [20]. In particular, at [60] 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 [Cripps v Dawson], Santow JA, with whom Mason P and Brownie JA agreed, said that for special circumstances to apply in relation to an application by the Chief Commissioner for costs before the Tribunal and Appeal Panel of the Tribunal's predecessor, the Administrative Decisions Tribunal (ADT), (in respect of relevantly identical legislation concerning the award of costs) "For this purpose, it suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional.".
3. In Fitzpatrick Investments Pty Limited v Chief Commissioner of State Revenue [2015] NSWCATAD 103, the Tribunal considered an application by the respondent Chief Commissioner of State Revenue who had been successful in substantive proceedings, which included 16 directions hearings and in respect of which the applicant withdrew the application for review on the Friday before the hearing was to commence on the following Monday for two weeks. The Chief Commissioner was unsuccessful in his claim for costs.
4. In its reasons the Tribunal said: 14 The Tribunal may only make a costs order under s 60 of the Act, as an exception to the general principle that each party to proceedings in the Tribunal is to pay the party's own costs, if the Tribunal "is satisfied that there are special circumstances warranting an award of costs". 15 In order to be awarded costs in this matter, the Chief Commissioner has to establish, having regard to the matters set out in s 60(3), that there are "special circumstances" warranting an award of costs. The phrase "special circumstances" is not given any meaning in the legislation but the phrase has been considered judicially.
5. The Tribunal referred to Cripps v Dawson and said: 18 The expression "special circumstances" is also found in other legislation and a similar interpretation has been suggested. For example, in Brian Lewis Groth v Secretary Department of Social Security [1995] FCA 1708 in considering whether there were "special circumstances" in Mr Groth's case which rendered it appropriate to disregard the whole or part of certain compensation payments he had received in the assessment of his pension entitlement under s 1184 of the Social Security Act 1991, Kiefel J agreed that the phrase "special circumstances" although imprecise is sufficiently understood not to require judicial gloss and that, for purposes of the appeal before her Honour, the only inquiry to be undertaken was whether there were special circumstances "to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case". 19 In two other decisions, Burchett J in the Federal Court took the same approach, although in different contexts. In Minister for Community Services and Health and Medicare Participation and Review Committee v Chi Keong Thoo [1988] FCA 54, Burchett J expressed the view that "the core of the idea of 'special circumstances' is that there is something unusual or different to take the matter out of the ordinary course" ... 20 In order to invoke s 60 and award costs in a matter, it is accordingly necessary to be satisfied that there are circumstances relating to the conduct of the proceedings that are clearly out of the ordinary. The circumstances "do not have to be extraordinary or exceptional". In determining that there are special circumstances, grossly unreasonable conduct or a finding of "serious unfairness" are not prerequisites to such a determination, they are nonetheless highly relevant considerations. 21 It is necessary to consider all the matters set in s 60(3), although some may not apply in a particular case. Finding special circumstances is not sufficient to exercise the discretion; it can only be exercised if the special circumstances identified by a party warrant the award of costs ...
6. In Yammatree Pty Ltd (Applicant); North West Local Land Service (Respondent) [2015] NSWCATAD 221 the Tribunal said: 8 … Subsection 60(2) gives the Tribunal a wide discretion to award costs where it is satisfied that there are 'special circumstances' that warrant an award of costs. That is, the Tribunal must be satisfied there are 'special circumstances' and that these warrant an award of costs. 9 Section 60(3) provides that the Tribunal may have regard to a range of factors. These include the subsection 60(3)(g) provision regarding "any other matter that the Tribunal considers relevant." It is clear that the factors set out in section 60(3)(a) to (f) are not meant to be an exhaustive list of what might constitute "special circumstances". 10 However, as the Appeal Panel noted in Obieta v Australian College of Professionals Pty Ltd [2014] NSWCATAP 38, it does not follow that a costs order should be made because some factors are made out. 11 It remains necessary for the Tribunal to weigh whether those circumstances are sufficient to amount to 'special' circumstances that justify departing from the ordinary rule that each party bear their own costs.

Guiding principle

1. In Zafiropoulos v Director General, NSW Fair Trading [2015] NSWCATOD 104 at [24] I held s 36(3) requires parties to proceedings before the Tribunal to co-operate with the Tribunal to give effect to the "guiding principle", that the Tribunal is to facilitate "the just, quick and cheap resolution of the real issues in the proceedings" and is to participate in the processes of the Tribunal. This guiding principle provided the procedural framework for the substantive proceedings.
2. In Chan v Commissioner for Fair Trading [2015] NSWCATAD 62, Scahill SM when considering a costs application, said at [35] to [38]: 35 To interpret the "special circumstances" provisions, it is relevant to consider the Objects of the CATA as set out in section 3 and the Guiding Principles to practice and procedure set out in section 36. 36 Section 3 of the CATA sets out the objects of the Act. The section includes (with the Tribunal's bolding): The objects of this Act are … to enable the Tribunal … to review decisions made by certain persons and bodies, and to ensure that the Tribunal is accessible and responsive to the needs of all of its users, to enable the Tribunal to resolve the real issues in proceedings justly, quickly, cheaply and with as little formality as possible, and to ensure that the decisions of the Tribunal are timely, fair, consistent and of a high quality, and … Guiding Principles of Practice and Procedure 37 Part 4 of the CATA deals with practice and procedure in the Tribunal. Section 36, within Part 4, sets out the guiding principle to be applied to practice and procedure in NCAT. 38 The Tribunal's understanding of the interaction of these sections is that both the parties and their representatives and the Tribunal itself have an obligation in their conduct to act with economy and to focus on the primary issues between the parties. …
3. Both parties made submissions in relation to what they see as relevant special circumstances and some paragraphs of s 60(3) in the context of the evidence before the Tribunal. I deal below with the various submissions and legislation. For convenience, I do not deal with all paragraphs of s 60(3) in numerical order.

Opposing claims

1. The dispute to be determined is that: 1. the Chief Commissioner claims at [1] that, in relation to the substantive proceedings, Mr Barsoum "should pay the Respondent's costs as agreed or assessed on the ordinary basis". 2. Mr Barsoum claims at [32] that costs do not follow the event in Tribunal matters as s 60 would need to be satisfied and "The circumstances of this matter do not satisfy that section".
2. The parties do not dispute that when there are special circumstances, the Tribunal has power to award costs in accordance with the Chief Commissioner's application: RSC s 60(2) and ASC [1]. However, Mr Barsoum claimed that there were no special circumstances, none of the matters in s 60(3) applied to him, and at [33] "Awarding costs to the respondent would not be in the public interest and would deter the public access to this Tribunal."

Consideration of opposing claims

1. The preamble to s 60(3) states "In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to" paragraphs (a) to (g) of the sub-section.
2. The Chief Commissioner relied at [3] on paragraphs (c), (d), (e) and (g) in s 60(3) to support his submission that there were relevant special circumstances in the substantive proceedings to warrant an award of costs.

Section 60(3)(c) and (e)

1. Section 60(3)(c) 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",
2. and s 60(3)(e) refers to: "whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance".
3. The Chief Commissioner submitted at [4] and [8] that Mr Barsoum's case had no tenable basis in fact or law and was misconceived and lacking in substance.
4. The Chief Commissioner's submissions included: 1. Mr Barsoum claimed he was not a 'foreign person' for the purposes of s 5A of the Land Tax Act 1956 (NSW) at midnight on 31 December 2016 as the words "the individual has actually been in Australia" for 200 days in the 12 months immediately preceding 1 January 2017 (the 2016 year) would be satisfied by an ongoing business relationship with Australia and did not require his physical presence in this country; and 2. in any event, Mr Barsoum claimed he had been physically present in Australia for 200 or more days in the 2016 year. 3. In relation to paragraph (1) above, Mr Barsoum's submission disregards the legislative words "actually been in" and Mr Barsoum's submission was not supported by any authority; 4. Mr Barsoum had conceded that he bore the onus of proving his case; and 5. In relation to paragraph (2) above both sources of documentary evidence before the Tribunal, being documents summonsed from the Department of Home Affairs and business records produced by Mr Barsoum, demonstrated that Mr Barsoum was physically present in Australia for less than 200 days during the 2016 year.
5. Mr Barsoum's submissions in response, included over 30 numbered paragraphs.
6. I rejected Mr Barsoum's submissions for several reasons. Overall, they provided no legal or factual basis to satisfy his onus; the number of days his business records stated he was in Australia during the relevant period did not add up accurately; some substantial submissions such as those relating to indemnity costs in paragraphs [7] and [8] were irrelevant to the proceedings as indemnity costs were neither applied for nor awarded; Mr Barsoum submitted at [18] that the Tribunal had not taken into consideration "established practices at Australian airports" without providing either adequate probative evidence as to such practices or any supporting authority; Mr Barsoum's claim at [22(a)] that there was no evidence that his proceedings were frivolous, vexatious, misconceived or lacking substance, disregards numerous specific findings in the Substantive Reasons to the effect that he bore the onus of supporting his submissions with probative evidence and had not provided either probative evidence or relevant authorities.
7. Mr Barsoum's claim that he was not a 'foreign person' for the purpose of the relevant legislation is contrary to the clear findings in the Substantive Reasons, from which Mr Barsoum did not appeal, and there is no need to repeat those reasons in these costs proceedings.

Section 60(3)(d) Section 60(3)(d) refers to "the nature and complexity of the proceedings".

1. The Chief Commissioner submitted at [9] that the dispute was straightforward and not complex, involving the contentions identified in his submissions at [4] to [6] which were dealt with above.
2. At [9] the Chief Commissioner also submitted: Those contentions, together with the various additional submissions made by the Applicant, each lacked an evidentiary basis or legal significance and was not only lacking in merit but was so obviously lacking in merit that any reasonable person in the Applicant's position would have recognised them as lacking in merit and bound to fail.
3. I note that the Chief Commissioner's submission in relation to s 60(3)(d) relied heavily on his submissions in relation to s 60(3)(c) and (e) dealt with above. He provided a very general submission regarding "additional submissions" by Mr Barsoum in the substantive proceedings without specifying any of the more than 60 submissions made by Mr Barsoum in those proceedings.
4. Mr Barsoum's costs submissions included his submissions in reply to RSC. It is somewhat difficult to identify Mr Barsoum's specific response (if any) to the Chief Commissioner's submission regarding s 60(3)(d) as Mr Barsoum made no express reference to any paragraph of s 60(3) in over 30 numbered costs submissions.
5. Mr Barsoum's submissions used a sub-heading referring to his alleged "genuine desire to settle and compromise" for paragraphs [23] to [31]. However, this otherwise commendable attitude is not supported by the documentary evidence before the Tribunal which shows that, besides substantially disregarding the Chief Commissioner's explicit reasons for his position, Mr Barsoum's counter-offer was to the effect that he pay the Chief Commissioner the equivalent of 27 days absence from Australia rather than the full year's tax. A rough calculation indicates acceptance by the Chief Commissioner of Mr Barsoum's offer would have involved a reduction of more than 90% of the tax assessed and, not surprisingly, was rejected by the Chief Commissioner. I do not regard such an offer as evidencing any "genuine desire to settle and compromise".

Section 60(3)(g)

1. Section 60(3)(g) refers to "any other matter that the Tribunal considers relevant".
2. At [10] to [14] the Chief Commissioner submitted that he relied on three matters he claimed were relevant to a costs order. At [15] the Chief Commissioner submitted that from his knowledge of the three matters, Mr Barsoum was aware that by proceeding with his application, he risked a costs order. The Chief Commissioner also submitted that, even during the hearing when the Chief Commissioner had already incurred "the vast majority of his costs", he gave Mr Barsoum the opportunity to walk away from the dispute free of a costs order, "but [Mr Barsoum] declined".
3. The three matters described at [11] to [14] are statements by the Chief Commissioner on each of 17 June 2020 by letter, 20 July 2020 in the Chief Commissioner's Outline of Submissions, and on 12 August 2020 by telephone in the morning tea break during substantive proceedings hearing.
4. The Chief Commissioner submitted at [15], and I find, that Mr Barsoum was aware that by proceeding with his Review Application, he was risking a costs order being made against him.
5. Mr Barsoum submitted the primary rule applicable to Tribunal proceedings is that each party pays its own costs [1] and special circumstances will only arise in rare cases such as issues of high public importance and /or the liberty of individuals who are unable to take action on their own behalf are required to depart from the usual rule on costs
6. I observe that Mr Barsoum is correct at [1] providing the Tribunal does not find that special circumstances exist which warrant an order for costs in which case costs are compensatory and the starting position is that costs should follow the event (Roden's case). Mr Barsoum has misread the decision in ASC [2] as the substantive proceedings did not involve issues of "high public importance" or "public interest" (Substantive Reasons at [84] - [89]) nor did Mr Barsoum succeed in any relevant part of the substantive proceedings nor did those proceedings involve a "novel" matter which was "beset with great difficulty" (Speight v Syme (1894) 20 VLR 107, Madden CJ delivering the judgment of the Full Court at [123]) at ASC [4]), nor is there any authority to support Mr Barsoum's submission at [10] that the substantive proceedings raise issues of "public interest" and questions "of much general importance". I reject Mr Barsoum's submissions to the contrary.
7. At [28] in Mr Barsoum's undated submissions in reply in the substantive proceedings and at [4.7] in his undated submissions filed 2 July 2020, which accompanied his application to the Tribunal, he submitted: 28 after August 2016 the Applicant already had the carriage of the matter before the High Court of Fiji That matter was chaired by his Lordship the Chief Justice of the High Court Not attending to that matter would have been disrespectful to his Lordship and would have put the profession into disrepute. 4.7 I had the carriage of a High Court matter and I was ordered by the High Court to attend a listed hearing. Disobeying the High Court is a serious matter for an Australian legal practitioner.
8. I observe that the proceedings to which Mr Barsoum referred did not involve Mr Barsoum representing a client before the High Court of Fiji. Rather, they related to an application by Mr Barsoum for admission before that Court.
9. Mr Barsoum produced no evidentiary support for his above submissions, nor did he refer to any relevant authority.
10. Mr Barsoum based his submissions at both [28] and [4.7] above on a letter dated 15 September 2016 from the Chief Registrar of the High Court of Fiji addressed to Mr Barsoum care of the lawyers instructed by Mr Barsoum to represented him in those proceedings. The letter informed Mr Barsoum that his "petition for admission" had been set down for hearing on 7 October 2016 at 12.15pm and informed him he would "need to make necessary arrangement for a counsel of at least 2 years standing as a lawyer to represent [him] in this hearing/admission".
11. It may be that there existed some documents to the effect that Mr Barsoum was required to personally attend the hearing before the Court. However, no such requirement was included in the letter from the Court, nor did Mr Barsoum provide any supporting evidence to the Tribunal. As Mr Barsoum bore the onus of proof in the substantive proceedings and provided no probative evidence in support of his submission, that submission failed.
12. In the Substantive Reasons I said: 72 I make the following observations: (1) There is no dispute as to Mr Barsoum's admission in Fiji in 2016. There is however, a dispute as to its relevance to these proceedings. (2) The letter dated 15 September 2016 from the High Court of Fiji refers to Mr Barsoum being represented by counsel for the hearing of his petition of admission. It may well be that Mr Barsoum's presence was required at the High Court. However, there is no evidence to this effect, merely that he was required to be represented by counsel. (3) … (4) Mr Barsoum's evidence is that he engaged a firm of solicitors and a barrister to assist in his Fijian admission and his presence was needed overseas to follow up the preparation and filing documents. Mr Barsoum provided no supporting evidence from any of the solicitors, barrister, the Board or the High Court nor any documentation as to why it was necessary for Mr Barsoum to leave Australia in order for his admission. It is possible that Mr Barsoum's unsupported statements are correct. However, I find it highly implausible that Mr Barsoum's personal involvement required his attendance outside Australia for over 100 days in order to comply with his unexplained duties to the High Court in the circumstances he referred to in his evidence.
13. In summary, I find that Mr Barsoum, who was admitted as a lawyer more than 10 years before the substantive proceedings, conducted his case in those proceedings in a manner which may well be characterized as "out of the ordinary". His case was misconceived and lacking in substance, whether or not it was extraordinary or exceptional.

Decision

1. Having regard to my above findings as a whole, I determine that the relevant factors are of sufficient significance to justify a finding of special circumstances warranting an award of costs in accordance with the Chief Commissioner's application. Accordingly, I order that: 1. The costs application by the Chief Commissioner be determined on the papers. 2. Mr Barsoum pay the costs of the Chief Commissioner, of and incidental to the substantive proceedings, as agreed or assessed on the ordinary basis.

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: 14 April 2021