Berry Patch Schofields Pty Ltd atf Berry Patch Schofields Unit Trust v Secretary, Department of Education

NCAT Administrative and Equal Opportunity|2022-07-26

REASONS FOR DECISION

The following reasons concern an application made by the Secretary, Department of Education ("the Respondent") for costs pursuant to s 60 of the Civil and Administrative Tribunal Act NSW 2013 (the "NCAT Act").

Background

A group of related companies, trusts and key people run five pre-school and long day care centres in Sydney. The key people involved with the Berry Patch centres are Mr and Mrs Gregory and Helen Jacobs and Mr and Mrs David and Melinda Brown.
Pending before the Tribunal are two proceedings, being Berry Patch Preschool Kellyville Ridge Pty Ltd v Secretary, Department of Education (No 2020/365480) ("BPKR proceedings") and this proceeding involving Berry Patch Preschool Schofields Pty Ltd atf Berry Patch Schofields Unit Trust ("BPPS proceedings").
Criminal proceedings have been commenced in the Local Court of New South Wales by the Respondent against BPKR and Mrs Helen Jacobs ("the criminal proceedings") which relate to the death of a child in care at the BPKR service in 2018.
By way of background, it is relevant to set out the nature of the BPKR and the BPPS proceedings pending before the Tribunal.

BPKR proceedings

I have adopted the recital of the BPRK proceedings as set out in the Affidavit of Mr Brett Hearnden, solicitor for the Respondent.
The BPKR proceedings seek a review of a decision of the respondent refusing a service approval to BPKR under s 43 of the Children (Education and Care Services) National Law (NSW) ("the National Law") in respect of a proposed service at 85 St Albans Road, Schofields (the "Schofields site"). These proceedings were commenced in the Tribunal by an application for administrative review filed on 24 December 2020.
In this application the Respondent filed 15 volumes of material, including:
an Affidavit of Dayna Greenfield affirmed 1 June 2021; and
an Affidavit of Amanda Wilson affirmed 1 June 2021.
BPKR filed and served affidavits of Melinda Brown dated 16 April, 2 July, 6 July and 31 August 2021 ('the Melinda Brown BPKR affidavits').
BPKR also filed and served affidavits of Helen Jacobs.
A number of interlocutory applications were disposed of by the Tribunal at a hearing on 1 October 2021. Those applications were made at the request of each party. At that hearing on 1 October 2021, a number of orders were made, including an order that leave be granted to file and serve evidence in reply to the Affidavit of Amanda Wilson made 29 October 2021. The BPKR proceedings were listed for further directions on 31 March 2022.
Mrs Helen Jacobs, is the nominated supervisor of BPKR.
The BPKR proceedings were stood over for further directions to 28 July 2022 to set a hearing date.
The BPKR proceedings are yet to be heard in this Tribunal.
The criminal proceedings have been listed for further hearing in late November 2022.
A coronial inquest into the death of the child is yet to be confirmed. The coronial proceedings have been stood over to a date to be fixed after the conclusion of the criminal proceedings.
Mr Hearnden deposes that part of the respondent's reasons for refusal of the service approval to BPKR related to the yet unresolved criminal proceedings and the coronial proceedings.

The BPPS proceedings

BPPS is the applicant in the BPPS proceedings seeking administrative review of a decision made by the Respondent on 24 June 2021 ("the Reviewable Decision"). It is this application which has been adjourned part-heard and is the proceeding to which the application for costs has been made. The application for administrative review was filed on 22 July 2021 and has been allocated proceedings (no. 2021/210560). The Reviewable Decision concerns a refusal by the Respondent pursuant to s 43 of the National Law to grant BPPS a service approval to operate a service at the Schofields site.
At the hearing on 1 October 2021, the Tribunal made orders for the filing of evidence in the BPPS proceedings. The proceedings were initially listed for hearing for five days commencing on 2 May 2022. An application on behalf of BPPS was made to vacate that date due to the unavailability of its Counsel. On 7 February 2022, the Tribunal vacated its previous orders made on 17 December 2021 and made a further timetable for the filing and serving of evidence and submissions, and relisted the hearing for five days commencing on 6 June 2022.
Relevantly, on 7 February 2022 the following orders were made: 1. Secretary, Department of Education is to file and serve all statements and documents in relation to the decision under review and an indexed and paginated bundle by 20 December 2021. 2. Berry Patch Preschool Schofields Pty Ltd atf Berry Patch Schofields Unit Trust is to file and serve in an indexed and paginated bundle all affidavits and other documentary materials on which it intends to rely by 18 February 2022. 3. Secretary, Department of Education is to file and serve any affidavits and other documentary materials in reply by 11 March 2022. 4. Berry Patch Preschool Schofields Pty Ltd atf Berry Patch Schofields Unit Trust is to file and serve an outline of submissions and a summary of legal arguments by 1 April 2022. 5. Secretary, Department of Education is to file and serve an outline of submissions and summary of legal arguments by 15 April 2022. 6. The hearing date of 2 May 2022 (5 days) is vacated. 7. The proceedings are listed for an in person hearing commencing on 6 June 2022 at 10.00 a.m. for 5 days at John Maddison Tower, Level 10, 86-90 Goulburn Street, Sydney. 8. Liberty to apply on 3 days' notice.

The substantive hearing

The substantive application in the BPPS proceedings was listed for hearing commencing on 6 June 2022. The estimate provided was five days. Counsel for BPPS at about 2.00pm on 10 June 2022 made an application for the hearing to be adjourned. The basis for the adjournment arose at the commencement of the cross-examination of Mrs Brown. The application was opposed by the Respondent. The Tribunal granted the adjournment. The respondent sought a costs order. The parties were directed to file an application and submissions about any costs order, which they have done. The BPPS proceedings have been listed for further directions in December 2022, a date after which the criminal proceedings should have concluded. The Tribunal will likely set a date for finalising the part-heard BPPS proceedings in mid-2023.
On 24 June 2022, the Respondent lodged a written application for payment of its costs thrown away of the adjournment being the costs of an incidental to: 1. two and a half days of the hearing; 2. three days of preparation by the solicitors and counsel for the respondent, thrown away because the case will need to be worked up again when it is listed for further hearing; and 3. the costs application.
The Respondent submits that her costs be set at a fixed sum of $73,671.74 and that they be paid within 21 days of the Tribunal's order, or alternatively any other order that the Tribunal deems fit.
BPPS opposes any order for costs being made. It contends that if the Tribunal makes a costs order, the amount sought is excessive.

Evidence

BPPS relied upon an affidavit of Mr Alexander Hughes affirmed on 15 July 2022 and written submissions. The respondent relied upon affidavits of Mr Brett Hearnden affirmed 24 June 2022 and Ms Olivia Shirvington sworn 25 July 2022 together with written submissions.

Relevant legislation and authorities

Generally, each party is to bear its own costs in proceedings before the Tribunal, unless there are 'special circumstances' that warrant a departure from that rule. Section 60 of the NCAT Act, provides: 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 the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014 ) 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.
It is accepted that 'special circumstances' are circumstances that are out of the ordinary, but need not be exceptional or extraordinary. In Edwards v Commissioner for Fair Trading, Department of Customer Service (Costs) [2019] NSWCATAP 249, at [9], the Appeal Panel said: "Special circumstances are circumstances that are out of the ordinary, but need not be those which are exceptional or extraordinary. These principles are well established and have been consistently applied in this Tribunal: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]; Commissioner for Fair Trading v Edward Lees Imports Pty Ltd (No 2) [2019] NSWCATAP 222 at [8]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [32]."
This was approved in the Appeal Panel's decision in McDermott v Wang [2022] NSWCATAP 325 at [40]. The Appeal Panel went on to identify the following further principles at [41] - [42], which I adopt: [41] The Tribunal's discretion to award costs must be exercised judicially, and not arbitrarily, capriciously or so as to frustrate the legislative intent: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [22]. [42] A costs order is compensatory and not punitive: Dr Douglass v Lawton Pty Ltd (No 2) [2007] NSWCA 90 at [22].
In CDP Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [32], the Appeal Panel set out the following principles, which I also adopt: (a) Each case will depend upon on its own particular facts and circumstances: [2015] NSWCATAP 152 at [27]. (b) The 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: Move Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48]. (c) Mere success (or failure) of an application does not give rise to special circumstances: The Owners - Strata Plan 5319 v Price [2020] NSWCATAP 245 at [46]. (d) Withdrawal of proceedings in the Tribunal whether at first instance or on appeal, may in some circumstances, constitute sufficient "special circumstances" to justify a costs order (Rodny v Stricke [2020] NSWCATAP 20). In other circumstances, withdrawal of proceedings is not sufficient to constitute sufficient "special circumstances" to justify a costs order (Durran t/as Canberra Sheds and Outdoor Storage v Bliss [2018] NSWCATAP 43; Dehsabzi v The Owners-Strata Plan No 83556 [2019] NSWCATAP 65). However, it is clear that the mere fact that proceedings are withdrawn is not, of itself, a sufficient "special circumstance" to justify a costs order. (d) If a proceeding is withdrawn at a relatively early stage, this weighs against departure from the principle in section 60 (1) of the CAT Act, that each party pay its own costs: The Owners - Strata Plan 70871 v Turek [2022] NSWCATAP 83 (28 March 2022) at [28]. (e) Where "special circumstances" are found to exist, the Tribunal has discretion to exercise in deciding what, if any, order should be made. The use of "may" in the opening words of s 60(3) indicates that there remains a discretion not to award costs even if the factors are present, to see if they point to the existence of "special circumstances" in the situation under consideration: Diaspora Holdings Pty Ltd v Owners SP 68608 [2019] NSWCATAP 250 at [17]. (f) Relevant to the exercise of that discretion are those facts upon which the finding of "special circumstances" was based. However, those findings do not constitute the whole of the relevant matters to be considered in deciding what, if any, order for costs should be made. Rather, the principles applicable to awarding costs generally must also be taken into account: Brodyn Pty Ltd v Owners Corporation Strata Plan 73019 (No 2)[2016] NSWCATAP 224 at [24].
In Abughazaleh v Commissioner of Police, NSW Police Force; Sydney Training Academy Pty Ltd v Commissioner of Police, NSW Police Force [2018] NSWCATAD 30, Senior Member Lucy made the following observations at [37]: [37] If a costs applicant establishes that some of the circumstances in s 60(3) apply, it does not necessarily follow that a costs order should be made. The Tribunal must "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": Obieta v Australian College of Professionals Pty Ltd [2014] NSWCATAP 38 at [81]. Even where special circumstances exist, the Tribunal has a discretion to exercise in deciding what, if any, order should be made (Brodyn Pty Ltd v Owners Corporation - Strata Plan 73019 (No 2) [2016] NSWCATAP 224 at [21], [24]).
In the Respondent's written submission in support of the costs application, oura attention is drawn to s 60(4) of the NCAT, where the Tribunal has a discretion to determine by whom and to what extent costs are paid, including that an order may include for costs to be paid forthwith. Unlike other jurisdictions, there is no restriction in either the NCAT Act nor in the Civil and Administrative Tribunal Rules (2014), that costs in respect of an interlocutory application do not become payable until the conclusion of the proceedings.
In support of her contention that costs be paid forthwith, Senior Counsel for the Respondent relies on the factors considered in Fiduciary Limited v. Morningstar Research Pty Ltd (2002) 55 NSWLR 1 at [11] - [13] which, included: 11 This identifies the first recognisable category of case, namely, where the application or aspect in respect of which the particular costs order is made before conclusion of the proceedings represents the determination of a separately identifiable matter or may be viewed as the completion of a discrete aspect. Examples of this may be found in Charlie Brown Pty Ltd v Green (unreported, NSWSC, McLelland CJ in Eq, 3 July 1995) and Bagley v Pinebelt Pty Ltd [2000] NSWSC 830. 12 A second factor which may incline the court to order that costs be payable forthwith is some unreasonable conduct on the part of the party against whom costs have been ordered. That was a factor taken into account by Simpson J in Gattellari v Meagher [1999] NSWSC 1279, although, in the end, her Honour did not think that the particular conduct warranted such an order. 13 A third factor is, as it was put by Giles J in Doran Constructions Pty Ltd v University of Newcastle (unreported, NSWSC, 16 December 1994), that "there is much to come in the proceedings" and "one can see a fairly long time before the proceedings are disposed of". In Horrobin (above), the decision of Priestley JA to order that costs be payable forthwith was influenced to some extent by the fact that the controversy between the parties would run for at least a further year. In Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (unreported, FCA, 18 August 1995), Lindgren J said that it may be appropriate for greater use to be made of the analogous provision in the Federal Court Rules, "particularly in cases such as this one where the final determination of the proceedings is so far away".
An applicant seeking such an order does not need to satisfy all three criteria. The factors are indicia of categories in which the discretion to order costs payable forthwith can be exercised.
That approach was adopted by the Appeal Panel in Woodward v Warwick Green Building Pty Ltd [2020] NSWCATAP 214 at [37], where Principal Member Suthers said: [37] The fact that the Stay Application was a separate and discrete event in the appeal which is now complete, in my view, weighs in favour of making an order that the respondent's costs should be ordered now, rather than reserved or made costs in the appeal: Fiduciary v Morningstar [2002] NSWSC 432.
The Respondent submits that Morningstar was also followed in Spuds Surf Chatswood Pty Ltd v. PT Limited [2007] NSWADT 130. In applying those principles, the then Administrative Decision Tribunal found that the costs order related to a discrete aspect of the case (adjournment application) and that the adjournment had occurred by reason of the unreasonable conduct of the applicant. As such, the Tribunal ordered that costs be payable forthwith.
The respondent contends: In Spuds Surf Chatswood, the Tribunal relied on the decision of the Supreme Court of New South Wales in Horrobin v. ANZ Banking Group Limited [1997] NSWSC 232 in which Priestly JA emphasized that each case needed to be considered on its own facts but that there was: ...a tendency for costs orders to be made payable forthwith when the proceedings in respect of which the costs orders have been made are regarded as sufficiently self-contained and detached or detachable from the proceedings yet to be heard, whether it be between the same or associated parties, as to make it seem just for an actual payment to be made in the meantime.
The Respondent is seeking a costs order be made in a fixed sum. The Tribunal is empowered to make a fixed sum costs order, by s 60(4)(a) of the NCAT Act, which provision provides a discretion to determine "to what extent costs are to be paid": 203 Castlereagh Street Pty Limited v Skybloo Holdings Pty Limited [2017] NSWCATAP 29 at [35]. In 203 Castlereagh Street, the Appeal Panel said at [39]-[40]: "39. The principles concerning when a Court might make a gross sum costs order are set out in a number of recent Court of Appeal decisions, including: Hamod v State of New South Wales [2011] NSWCA 375 at [813]ff; eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd (No 2) [2015] NSWCA 422 at [8]ff and [30]; and Kostov v Zhang (No 2) [2016] NSWCA 279 at [19]ff. 40. These principles, relevantly adapted to the circumstances of the Tribunal, include: (1) A fixed sum costs order involves a departure from the usual process by which costs are assessed in accordance with the statutory procedures now relevantly found in the Legal Profession Uniform Law Application Act 2014 (NSW) (especially Pt 7 dealing with "ordered costs") and the Legal Profession Uniform Law (NSW), eInduct Systems at [8]; (2) A fixed sum costs order may be appropriate where: (a) the sum of costs in question is relatively modest, eInduct Systems at [30]; (b) a party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment, Hamod at [813], [816] and [817], eInduct Systems at [30]; (c) the assessment of costs would be protracted and expensive, Hamod at [813] and [817]; and/or (d) the case was complex, Hamod at [815]-[817]; (3) Sections 36(1) and (4) of the NCAT Act (which can be seen as equivalent to those in ss 56(1), 57(1)(d) and 60 of the CP Act) suggest that the following factors merit particular consideration: (a) the relative responsibility of the parties for the costs incurred; (b) the degree of any disproportion between the issue litigated and the costs claimed; (c) the complexity of the proceedings in relation to their cost; and (d the capacity of the unsuccessful party to satisfy any costs liability, Hamod at [816], Kostov at [22]. (4) An order for fixed sum costs should be based on an informed assessment of the actual costs, having regard to the information before the Tribunal. Furthermore, the approach taken to estimate the costs must be logical, fair and reasonable. This may involve an impressionistic discount of the costs actually incurred in order to take into account the contingencies that would be relevant in any formal costs assessment, Hamod at [820]; (5) The power to make a fixed sum costs order should only be exercised when the Tribunal considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available, Hamod at [813], Kostov at [23]."
The Appeal Panel set out the following factors to be considered in deciding whether to make a costs order in a fixed sum in: STAR Training Academy Pty Ltd v Commissioner of Police (No 2) [2022] NSWCATAP 98 at [50]: (1) The discretion is not confined and may be exercised whenever the circumstances warrant its exercise: Harrison & Anor v Schipp [2002] NSWCA 213; 54 NSWLR 738 per Giles JA at [21]-[22]; (2) "The power should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available.": ibid, at [22]; (3) The power must be exercised judicially and only after giving the parties an adequate opportunity to make submissions. The Tribunal should be confident that the approach taken to estimate costs is fair, logical and reasonable: Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; 135 ALR 160, von Doussa J; (4) The use of the power may be appropriate where the formal assessment would disadvantage the successful party because of the likely inability of the unsuccessful party to discharge the costs liability in any event: Harrison v Schipp; Sony Entertainment (Aust) Ltd v Smith (2005) 215 ALR 788 at [90], [194]-[195]; Hadid v Lenfest Communications Inc [2000] FCA 628; (5) The power may also be exercised where a party's conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings: Leary v Leary [1987] 1 WLR 72; [1987] 1 All ER 261; Sony Entertainment (Aust) Ltd v Smith; Microsoft v Jiang (2003) 58 IPR 445; [2003] FCA 101; (6) The assessment of any lump sum to be awarded must consider the complexity of the issues raised on the pleadings; the interlocutory processes; the preparation for final hearing and the final hearing: Smoothpool v Pickering [2001] SASC 131; (7) In the exercise of its discretion the Tribunal is not required to undertake a detailed examination of the kind that would be appropriate to taxation or formal costs assessment: Harrison v Schipp at 743; Hadid v Lenfest Communications Inc at [35]; Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1 at 5; [1999] FCA 673; (8) A discount of the costs actually incurred or estimated may be applied, in order to take into account the contingencies that would be relevant in any formal costs assessment: Leary v Leary at [76] per Purchas LJ; Beach Petroleum NL v Johnson (No 2) at 123; Auspine Ltd v Australian Newsprint Mills Ltd at 164-165. A discount in the range of 10-30% is typically appropriate: Ross v Padget [2016] NSWSC 1851 at [16] and [21]; Fisher-Pollard by her tutor Fisher-Pollard v Fisher-Pollard [2018] NSWSC 807 at [38]). However, the appropriate order in each case will turn upon the evidence: Hamod v State of New South Wales [2011] NSWCA 375 at [813] per Beazley JA (Giles and Whealy JJA agreeing); (9) On the one hand the Tribunal must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary "fail safe" discount on the cost estimates submitted to the Court: Leary v Leary at 265; (10) Finality to litigation is in everyone's interest. In many cases that factor alone will weigh heavily on whether a lump sum costs order should be made: Edward Ted Lakis and Anor v Michael Victor Lardis and Anor (No 3) [2018] NSWSC 1296 at [57]; Lawcover Insurance Pty Ltd v Muriniti and Newell [2018] NSWSC 558 at [10]; (11) Where a lump sum costs order is appropriate, the Tribunal should take a "broad brush" approach to determining the lump sum: Harrison v Schipp; (12) Requiring the same or similar level of detail as in a formal costs assessment would defeat the purpose of the lump sum order." Bechara (T/as Bechara and Co) v Bates [2016] NSWCA 294 at [14].
Some of those principles are set out in the Court of Appeal decision in Bechara (t/as Bechara and Co) v Bates [2016] NSWCA 294 in which Beazley P, Meagher and Payne JJA relevantly state at paras [12] - [18]: [12] The power to award a lump-sum should only be exercised when the Court considers that it can do so fairly between the parties and where an appropriate sum can be determined from the available materials: Harrison v Schipp (2002) 54 NSWLR 738; [2002) NSWCA 213 at 742-723 (21)-(22); Beach Petroleum NL v Johnson (No 2)(1995) 57 FCR 119 at 123. [13] The power may also be exercised where a party's conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings: Hamad v New South Wales (2011] NSWCA 375 at (818) per Beazley JA (Giles and Whealy JJA agreeing). [14] A "broad brush" approach is appropriate. To require the same or similar level of detail as in a formal costs assessment would defeat the purpose of the lump sum order: Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1; (1999) FCA 673 at 5 (16); Penson v Titan National Ply Ltd (No 3) (2015] NSWCA 121 at [7]. [15] The courts have typically applied a discount in assessing costs on a gross sum basis: Hamad v New South Wales at (814]. ... [18] The Court is satisfied that the total costs of this litigation will become even more disproportionate if the costs are referred for assessment and a lump-sum costs order is not made. The reasoning in Hamad v New South Wales at [816]-[817] is apposite.
We are satisfied that we have a wide discretion to make a costs order in accordance with the provisions of s 60 of the NCAT Act. We are also satisfied that the costs order could include that costs be paid in a fixed sum and forthwith.

The basis of the respondent's costs application

The basis upon which the respondent seeks to displace the usual position that each party bear their own costs was set out as follows: 1. BPPS' lack of preparation, conduct and/or adjournment application gives rise to 'special circumstances' pursuant to s 60(2) of the NCAT Act such that an award of costs is warranted; 2. those special circumstances arise because BPPS' conduct was characterised by one or more of the following: 1. BPPS conducted proceedings in a way that unnecessarily disadvantaged the respondent within the meaning of s 60(3)(a) and/or 2. BPPS was responsible for prolonging unreasonably the time taken to complete the proceedings within the meaning of s 60(3)(b) and/or 3. BPPS did not comply with the duty imposed by s 36(3) of the NCAT Act, in that it failed to cooperate with the Tribunal to give effect to the guiding principle within the meaning of that provision under s 60(3)(f).

The parties' submissions

The Respondent relies on and refers to 23 different matters in support of her application for an order for costs pursuant to s 60 of the NCAT Act.
In our view, the critical factors which lead to our conclusion that BPPS should pay the Respondent's costs of and incidental to 2 days of the hearing and the respondent's costs thrown away because of the adjournment are as follows.
BPPS, through its legal advisers made a forensic decision to agree to proceed with the Tribunal to dispose of this application in a hearing set down for five days commencing on 6 June 2022. In doing so, it was aware that the criminal proceedings against BPPK and Mrs Helen Jacobs were part-heard before the Local Court of New South Wales and were due to be heard in late November 2022. Despite this, BPPS sought to rely in these proceedings on evidence from Mrs Melinda Brown, an officer of BPKR and also evidence from Mrs Helen Jacobs who was and remains the nominated supervisor of the BPKR service.
It would have been apparent to Counsel for BPPS that there was at least a possibility, if not a high possibility, that any cross-examination of both Mrs Brown and Mrs Jacobs could prejudice the defence in the criminal proceedings. It was also probable in our view that even where the Tribunal was to issue a s128 Certificate under the Evidence Act 1995 (NSW) ("the Evidence Act") to protect self-incrimination by an individual, that protection is not available to a corporate entity or its directors and officers. In those circumstances, the forensic decision made by Counsel for BPPS to expose the evidence of Mrs Brown and/or Mrs Jacobs in these proceedings, which may impact the defence being run in the criminal proceedings, placed BPPS in the position where it may have had to, and in this case it did, make an application for an adjournment of the BPPS proceedings to avoid that conflict. We are satisfied in these circumstances that BPPS in conducting the BPPS proceedings in this way unnecessarily disadvantaged the respondent. This is because the hearing was ultimately adjourned to avoid any prejudice to the defence in the criminal proceedings. The Respondent was prejudiced in so far as its preparation for the hearing and days set aside have to some degree been wasted.
In BPPS' written submissions it contends that it was not expected the Respondent would embark on cross-examination of Mrs Brown about the contents of CCTV footage captured at the BPKR Service in August 2018 until the end of the Respondent's case. That is, at a time when the evidence of Ms Wilson was tendered and marked. BPPS argues that this would be the time when it could consider whether to adduce evidence of Mrs Brown in reply, and then consider what, if any, risk that evidence may have in respect of the criminal proceedings.
We do not accept this contention. Counsel acting for a party is required to make forensic decisions before and during the conduct of proceedings and often at the very last minute. This can occur as, and when evidence is adduced, and at times when evidence is not adduced. We do not accept the proposition that Senior Counsel for the Respondent should be constrained in the way the cross-examination of Mrs Brown was to be conducted. It is trite to say that subject to the rules of procedural fairness (and the Evidence Act which in these proceedings the Tribunal is not bound by), cross-examination of a witness can explore any matter relevant to the proceedings.
We also reject BPPS's contention that any conduct of the Respondent caused the adjournment. The late service of the Respondent's evidence is not relevant to the way in which the hearing was run from 6 to 10 June 2022. If, as is contended by BPPS, that it was truly prejudiced or taken by surprise by the late service of any evidence by the Respondent, an application to adjourn the hearing could have been made before, or at the commencement of the hearing. No such application was made. We have also considered that BPPS filed evidence in reply to the affidavit of Ms Amanda Wilson on 31 May 2022 as set out in Mr Hughes' affidavit.
BPPS offered both Mrs Brown and Mrs Jacobs for cross-examination. BPPS's legal advisors made a forensic decision in doing so. To suggest that BPPS was not in a position to make a decision about its evidence until after the question of the CCTV issue had been determined is rejected. BPPS made a decision to peruse the BPPS proceedings and the criminal proceedings simultaneously. In doing so, it ran the risk of being required to make an application for an adjournment should the evidence in the BPPS proceeding prejudice the criminal proceeding. BPPS then decided to offer Mrs Brown for cross-examination, knowing full well that Senior Counsel for the Respondent could conduct the cross-examination of Mrs Brown in any way within the confines of relevant matters and procedural fairness. We find no fault in the conduct of the Respondent's case which led to the hearing being adjourned.
The Tribunal also has a wide discretion concerning the conduct of proceedings before it (s 38 of the NCAT Act). In our view, it was open to Senior Counsel for the respondent to indicate that questions of Mrs Brown would be asked about the contents of the CCTV footage which the parties were aware of prior to the commencement of the hearing on 6 June 2022. If there was a risk of any prejudice to the conduct of the criminal proceedings concerning evidence which may be adduced in the BPPS proceedings, an application for an adjournment of the hearing could or should have been made by BPPS either on the morning of the 6th of June 2022 or prior to that date. No such application was made. BPPS was aware of the CCTV evidence sought to be adduced in the Respondent's case from Ms Wilson before 6 June 2022. It was proper for Senior Counsel to cross-examine Mrs Brown in the usual way, which Ms Nomchong SC was proceeding to do. It was not appropriate in our view to carve off parts of the cross-examination of Mrs Brown until after the evidence of Ms Wilson was formally tendered in the Respondents case. To do so, would in our view, not further the guiding principle in s 36 of the NCAT Act. If, as was discussed during the hearing, the evidence of Ms Wilson about CCTV was not relied upon, we indicated to the parties that that part of Mrs Brown's evidence relating to CCTV would be given no weight.
We find that the application for an adjournment of the substantive hearing amounts to special circumstances in accordance with s 60(3)(a). This is because it is apparent in our view that the subject matter of the criminal proceedings was going to be a live issue in the BPPS proceedings. It was also apparent that Mrs Brown's evidence, as a director of BPKR, may prejudice the criminal proceedings. The circumstances in our view are out of the ordinary and have unnecessarily disadvantaged the Respondent. We find that the respondent should be awarded its costs thrown away of and incidental to the adjournment.

BPPS' conduct of the BPPS proceedings

Senior Counsel for the Respondent contends that the approach adopted by BPPS in the preparation and running of the proceedings was 'disordered and unprepared'. Ms Nomchong SC relies upon the following matters.
The four affidavits of Mrs Brown tendered in the BPPS proceedings were prepared for separate proceedings, being the BPKR proceedings. They are the affidavits collectively described as the Melinda Brown BPKR affidavits. Those affidavits did not have a cover page referable to the BPPS proceedings and in the most had been filed in support of the previous interlocutory applications in the BPKR proceedings in October 2021. The affidavits referred to "the applicant", which was the applicant in the BPKR proceedings and not the BPPS proceedings.
The affidavits of 2 July 2021 and 6 July 2021, referred to affidavits, paragraph numbers and page numbers of material filed in the BPKR proceedings which were not in evidence in the BPPS proceedings. In the result, those parts of Mrs Brown's affidavits are nonsensical.
The affidavit of 9 July 2021, related to an issue about the admissibility of CCTV footage that had previously been resolved in the Local Court criminal proceedings before the commencement of the 6 June 2022 hearing. The Local Court determined this issue on 24 and 25 March 2022. Despite this, the 9 July 2021 affidavit was being read in the BPPS proceeding.
The Respondent made numerous objections to the Melinda Brown BPKR affidavits. Following the luncheon adjournment on the third day of the hearing, being 8 June 2022, BPPS commenced the tendering of Mrs Brown's evidence. The Tribunal gave Counsel for BPPS some time prior to the luncheon adjournment to decide which parts of her evidence he was able to adduce and to also have discussions with Ms Nomchong SC about that. It transpired that a discussion with Ms Nomchong did not occur prior to the Tribunal reconvening at 2.00 p.m. The Tribunal granted the parties more time to discuss how the evidence was to proceed.
After that indulgence, Ms Nomchong SC submitted that Mr Searson had indicated that a large number of changes to the Affidavit evidence of Mrs Brown needed to be made. It became apparent at this stage that there were numerous defects to the Melinda Brown BPKR affidavits. The affidavits were either not relevant to the BPPS proceedings, or that they required amendment to become so relevant. Some of those defects are listed above in paragraphs [53] to [55].
At approximately 2.30 p.m., Ms Nomchong SC said that because of the defects in the affidavits, the Respondent needed to reconsider her position and her instructors would need to obtain instructions about how to proceed. Mr Searson opposed that adjournment. Further submissions between Counsel and the Tribunal took place. It became apparent that the references in Ms Brown's Affidavit did not reflect the already voluminous bundles before the Tribunal and that Mr Searson would require time to vary those references and give notice of changes to the Respondent.
Mr Searson indicated to the Tribunal that parts of the contents of some of Mrs Brown's affidavits were not going to be read. There was some discussion between Counsel about the service of affidavits of the Respondent's witnesses, particularly Ms Amanda Wilson and Ms Dayna Greenfield. Those affidavits were served on BPPS on 9 May 2022. Mr Searson contended that the service of those affidavits was late in terms of the preparation of the proceedings. They were also served outside of the Tribunal's previous orders. Be that as it may, the fundamental problem that BPPS faces is that it either on instruction, or for some other reasons, BPPS's legal advisors served and seek to rely on affidavits in the BPPS proceedings which were filed in the BPKR proceedings. This had the effect that the references were not relevant to the material filed in the BPPS proceedings and that the name of the applicant, which was sworn evidence, related to the BPKR proceedings. Prima facie the evidence was not relevant to the BPPS proceedings. Despite this, BPPS sought that the defective evidence be tendered and 'fixed up' on the run.
Mr Searson submitted that there was nothing "factually new" which was sought to be adduced by any of the changes in Mrs Brown's affidavit. Whilst that may be the case, it is not satisfactory that evidence sought to be tendered in one matter, relates to a different proceeding. It is not a simple matter of amending references in an affidavit where the witness has either sworn or affirmed that evidence, and the contents of the affidavit does not relate to the matters pending before the Tribunal. It is also not satisfactory that amendments are attempted to be made from the bar table to affidavits being tendered when the deponent has not affirmed any of those changes under oath. We reject the submission that the Tribunal should accept this evidence pursuant to ss 38(4) and (6)(a) of the NCAT Act. Where possible, parts of the evidence might be able to be accepted, and we did accept some minor corrections or amendments. However, the majority of the Melinda Brown affidavits had been filed in the BPPS proceedings when they related to the BPKR proceedings. The material was not a mere statement, it was evidence sworn on oath. This can not be corrected unless the deponent affirms the changes, under oath or by affirmation. In our view this is fundamental and not something that can be dismissed as a mere technicality.
We find that the main reason for which the references to parties and other documents in the affidavits of Ms Brown were defective, is because the affidavits refer to bundles of documents filed in the BPKR proceedings and not the BPPS proceeding. I asked Mr Searson why the defects had not been detected and corrected prior to the commencement of the BPPS proceedings and he responded: "Oh, from, from my perspective Senior Member, simply because my, my diary within the last month has been full." This is a far from satisfactory explanation.
Given these circumstances, the Tribunal allowed for hearing to be adjourned on the afternoon of 8 June 2022. This was to enable the Respondent to consider her position, provide instructions to her solicitors and to deal with the proposed changes to Mrs Brown's affidavit material.
On 9 June 2022, BPPS continued the tender of the Melinda Brown affidavits. The process led to many objections and some attempts by the Tribunal to promote the guiding principle as set out in s 36 to determine the real matters in dispute in the proceedings. However, there were parts of Mrs Brown's evidence that was not allowed because of its defective nature. Some of the objections related to the contents of the affidavits but most related to Mr Searson's efforts to correct the defective nature of the evidence. During the course of the hearing some of Mrs Brown's evidence had to be rectified under oath with her in the witness box. This would not have been necessary if the affidavits had been properly prepared in the first place.
We accept the Respondent's submissions that the entire day of 9 June 2022 was wasted. This is because of the defective nature of the Melinda Brown affidavits which had been filed in the BPPS proceedings related to the BPKR proceedings and suffered from the defects in [53]-[55]. At the conclusion of day four of the hearing, on 9 June 2022, Mr Searson said he would be seeking leave to file one further affidavit. He proposed that that affidavit would refer to the previous affidavits and include what changes needed to be made in terms of page number, references and other matters. We stood that matter over to the next day of hearing on 10 June 2022 to deal with any application proposed to be considered.
We have also considered on 9 June 2022 a short adjournment was taken because the recording equipment required a technician. This was in our view not significant.
Before we adjourned the hearing on 9 June 2022, we asked Mr Searson whether any other evidence to be tendered in the proceedings had similar defects as had been revealed concerning Mrs Brown's evidence. Mr Searson said that there "may be with regard to Helen Jacobs …". Mrs Helen Jacobs affidavits had also been prepared for the BPKR proceeds and were filed in the BPPS proceedings. This is in our minds further evidence of the lack of preparedness of BPPS in ensuring the matter was ready to proceed in accordance with the guiding principle in s 36 of the NCAT Act, at least in so far as the affidavit material of the two witnesses Mrs Brown and Mrs Jacobs.
On the morning of 10 June 2022 (day five), Mr Searson sought to adduce further evidence in chief from Mrs Brown. That was objected to and ultimately refused. Parts of Mrs Browns affidavits were amended to properly reflect the name of the applicant and references to bundles of documents before the Tribunal.
Ms Nomchong SC commenced cross-examination of Mrs Brown. Over objection, the Tribunal allowed for the cross-examination was to move into questions pertaining to the CCTV. It is at that point Mr Searson made an application for an adjournment until after the conclusion of the criminal proceedings. This was because the cross-examination of Mrs Brown may prejudice the defence of the criminal proceedings. The application was opposed by the Respondent. We allowed the adjournment.
In deciding whether the proceedings were conducted in a way that unnecessarily disadvantaged the Respondent, we have considered the written submissions of BPPS and the Respondent. We accept that some of Mrs Brown's evidence that was accepted, after objection, would likely have been tendered in the BPPS proceedings even if the defective nature of the affidavits was not present. However, we reject BPPS' contention that even where parts of the defective affidavits were admitted, the cumulative effect of the defects did not unnecessarily prolong the proceedings and did not disadvantage the respondent. This is because the Respondent, rightly, made appropriate objections to Mrs Brown's affidavit evidence which had not been properly prepared and was not relevant to the BPPS proceedings.
We find over 9 and 10 June 2022, the Respondent had to take time to make changes to the preparation of her case where Mr Searson foreshadowed changes to Mrs Brown's affidavit evidence. Senior Counsel for the Respondent was required to reconsider objections and the cross-examination of Mrs Brown in circumstances where her primary evidence was amended. We also gave Mr Searson considerable time to consider the respondents objections and also how he intended to 'fix up' Mrs Brown's evidence to make it relevant to the BPPS proceedings.
We find that at least 2 days of hearing were wasted due to the filing of Melinda Brown's affidavits. Her affidavits contained material defects which were not able to be easily corrected in a timely and efficient manner, despite Mr Searson's attempt to do so. We find that BPPS failed to comply with the duty imposed by s 36(3) of the NCAT Act and this amounts to special circumstances.
We find that there are special circumstances to make a costs order. This is because of the failure of BPPS to file and tender affidavits of Mrs Brown that were relevant to the BPPS proceeding and in doing so it conducted its case in a way that unnecessarily disadvantaged the Respondent (s 60(3)(a) of the NCAT Act).
We also find there are special circumstances to make a costs order because BPPS has been responsible for prolonging unreasonably the time taken to complete the proceedings (s 60(3)(a) of the NCAT Act). This is because of the time taken to deal with the defective nature of Mrs Brown's evidence and for the reasons that the hearing had to be adjourned so as to not prejudice the criminal proceedings.
We find that the costs order should be made payable forthwith. This is because of the delay in the hearing proceeding which resulted from the defective nature of Mrs Brown's affidavits. Also because of the unreasonable lack of preparedness of BPPS to ensure the affidavits which were filed in the BPPS proceedings were relevant and free of obvious defects and irrelevant references. This in our minds represents a discrete aspect of the proceedings, and the unreasonableness of BPPS which are factors to be considered as set out in Morningstar.
We also find that these proceedings are far from being disposed of. There is no certainty that the criminal proceedings will be concluded in 2022. Even if they were, the likelihood that the BPPS proceedings will be re-listed for further hearing may not be until May or June 2023 in the Tribunal. We can see "a fairly long time before the proceedings are disposed of". This warrants that costs should be paid forthwith.
The same conclusion is drawn with respect to the hearing being adjourned. This is in our view a separately identifiable matter which satisfies the factors in Morningstar.
Given our finding with respect to the costs order being forthwith, we are satisfied that the costs application has been appropriately made, and it is not premature.
The remaining matter we deal with is whether the Tribunal should make a costs order in a fixed sum. We have set out above the amount which is sought by the respondent, being $73,671.74.
We have considered the factors which are set out in 203 Castlereagh Street Pty Limited and Star Training Academy Pty Limited, Bechara (t/as Bechara and Co) v Bates and STAR Training Academy Pty Ltd v Commissioner of Police (No 2). We are not satisfied that we can exercise a cost assessment function fairly between the parties given the quantification of the costs which are set out in Mr Hearnden's Affidavit. The Respondent has incurred significant costs, which she submits results from the conduct of BPPS and the adjournment. We find that to do justice between the parties a detailed examination of the kind that one would expect from a formal costs assessment should be undertaken.
In our view, the assessment of any lump sum to be awarded requires consideration of the preparation for the hearing, which the Respondent submits has been wasted. This would require a complex review of the issues raised.
We are mindful that the Tribunal is not an expert in assessing costs and it does not have to be when considering a fixed amount. However, to prevent prejudice to either party in either overestimating the costs which may be payable and not causing an injustice to the Respondent by making an arbitrary award or discount on the costs estimate, the costs should be assessed by a costs assessor.

Orders 1. The applicant is to pay the respondent's costs of and incidental to two days of the hearing being 9 and 10 June 2022. 2. The applicant is to pay the respondent's costs thrown away of and incidental to the adjournment. 3. The applicant is to pay the respondent's costs of and incidental to this application. 4. The applicant shall pay the costs as agreed or assessed within twenty-one days of that agreement or assessment.

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

Amendments 03 April 2023 - [43] heading and paragraph amended to correct the word "bases" to read "basis". 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 April 2023

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