Cessnock Tyres Pty Ltd v Chief Commissioner of State Revenue

Submissions

1. The respondent's application was supported by an affidavit of Ewa Pardey affirmed 15 June 2018. That affidavit referred to various communications between the parties' legal representatives concerning preparation of the appeal for hearing, including the bundle of documents and the transcript. It also set out a history of the proceedings including that the appellant sought to amend the appellant's grounds of appeal limited to four matters.
2. The affidavit annexed various documents to which reference was made in submissions. These documents included correspondence concerning the likely success of the appeal, correspondence concerning delays of the appellant in complying with the Tribunal and correspondence concerning the preparation of a bundle of documents for the appeal.
3. In its written submissions, the respondent provided a chronology of events concerning the conduct of the appeal which made reference to the documents referred to in the affidavit above. Having referred to the relevant legislation concerning costs and when hearings are required, the respondent made the following submissions on costs.
4. The respondent referred to the decisions of Fitzpatrick Investments Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 103 and Madikian v Chief Commissioner of State Revenue [2017] NSWCATAD 363 and submitted that there were special circumstances for the following reasons: 1. the appellant was invited to discontinue the appeal at an early stage but did not do so; 2. until immediately prior to the hearing, the appellant's grounds of appeal were unclear, uncertain and extensive and the respondent was forced to incur unnecessary costs in having to address all these grounds and documents, only 3 substantive grounds being pursued at the final hearing; 3. the appellant impermissibly sought to agitate matters it had abandoned at the original hearing and adduce new evidence, forcing the respondent to incur unnecessary costs in addressing those matters. Further, the appellant ultimately abandon these claims at the final hearing; 4. the version of the transcript was substandard, the respondent being required to provide an Auscript transcript, which it paid for; 5. the appellant failed to file and serve materials as directed, forcing the respondent to incur unnecessary costs in continually having to follow up the appellant in consequence of its breach of the timetable.
5. Consequently, the respondent submitted: 1. the respondent was unnecessarily disadvantaged because the appellant did not discontinue its appeal at an early stage, failed to clearly concisely stated grounds of appeal and abandon grounds at the final hearing, failed to provide an acceptable transcript as directed and failed to comply with directions of the Tribunal in connection with the preparation of the appeal; 2. the appellant was responsible for prolonging unreasonably the time taken to complete the proceedings because the appellant failed to discontinue the proceedings at an early stage, failed to concisely stated grounds of appeal thereby causing the respondent to spend additional time in addressing uncertain and extensive grounds and failed to comply with directions; 3. the appellant's case was weak and made claims that at no tenable basis in fact or law, as evidenced by the fact that the claim was dismissed at first instance and on appeal; 4. the appellant complicated the proceedings by failing to discontinue the proceedings at an early stage, failing to concisely state its grounds of appeal, failing to provide an accurate transcript as directed and by failing to comply with the Appeal Panel's directions and timetable for preparation; 5. the appellant bought proceedings that were frivolous or vexatious or otherwise misconceived, because the grounds of appeal were unclear, only 3 substantive grounds were finally pursued and the appellant's case was dismissed at first instance and on appeal; 6. the appellant failed to comply with its duty under s 36(3) of the NCAT Act in that it did not comply with directions on a timely basis and did not facilitate the just, quick and cheap resolution of the real issues in dispute, raising grounds of appeal that were unclear, uncertain, extensive and, other than 3 grounds of appeal, ultimately abandon.
6. Lastly, the respondent says the failure of the appellant to provide an accurate transcript should be considered as another relevant matter.
7. In reply, the appellant made the following brief submissions: 1. An invitation to discontinue an appeal which is not accepted by an appellant is not out of the ordinary, nor is the fact that a respondent might, ultimately, be successful. Similarly, the preparation of submissions in the attendance at directions hearings is not out of the ordinary. 2. The fact the final grounds of appeal advance were less extensive is not out of the ordinary. Forensic decisions made to limit the scope of argument and focus on the real issues ought to be encouraged. To find there were special circumstances in cases where grounds of appeal were abandoned would mean that a party would be discouraged from seeking to confine its appeal. 3. In relation to the transcript, the respondent had already obtained a copy of it from Auscript. Consequently, nothing the appellant did caused costs to be incurred. 4. There were 2 directions hearings which would have been required in any event. The appeal was filed on 2 January 2018 and heard on 4 May 2018, 4 months later. There was no unreasonable prolongation of the proceedings. 5. The fact the appellant was unsuccessful at first instance and on appeal does not mean the proceedings were frivolous or vexatious. The Appeal Panel made no finding to this effect.
8. Accordingly, the appellant says the no special circumstances.
9. In reply, the respondent made the following submissions: 1. the appellant was imprudent in pursuing its appeal and should have discontinued it following receipt of the respondent's letter dated 23 January 2018 (affidavit Tab 4). It was unusual for 2 directions hearing in an appeal, the second directions hearing being required because of the appellant's breach of the timetable. Also unusual was that the appellant had alleged so many grounds of appeal, all but 3 being abandoned. 2. The decision to limit the grounds of appeal was made belatedly, the respondent being forced to incur unnecessary costs in responding to all grounds originally raised; 3. the appellant should compensate the respondent for obtaining the Auscript transcript where it has had free use of the transcript having previously been "directed to, but failed to, provide an accurate transcript to assist the Appeal Panel". 4. The appellant's continual breach of the timetable required the respondent to incur costs in following up the appellant. The failure to file and serve submissions as required was "so fundamental that the matter could not proceed", the appellant failing to reply to correspondence from the respondent. 5. The effect of dismissal of the appellant's case at first instance and on appeal "self-evidently showed that the appellant made claims that had no tenable basis in fact or law and/or that the proceedings were misconceived or lacking in substance".

Consideration

1. Both parties agree that an order should be made dispensing with a hearing of the costs application. We think it appropriate such an order should be made, the parties having had an opportunity to provide written submissions on the issue of cost and hearing otherwise being unnecessary.
2. Both parties agree that the provisions of s 60 apply and that the Appeal Panel may only make an award for costs if satisfied that special circumstances exist. There is no dispute that special circumstances mean circumstances which are out of the ordinary but not necessarily extraordinary or exceptional. Rather, the only issue for determination is whether or not special circumstances do exist warranting an award of costs.
3. Section 60(3) sets out the factors to be considered by the Appeal Panel in determining whether or not special circumstances exist. Again, there is no contest about what are relevant factors, the submissions of the respondent being made referenced to the factors set out in that section.
4. The decision the subject of the appeal was made on 15 December 2017. The appeal was lodged on 2 January 2018. The matter was listed for call over and directions for the preparation for hearing were made on 25 January 2018, the matter fixed for hearing on 4 May 2018.
5. As outlined by the respondent, the proceedings were again listed for directions on 20 March 2018 because the timetable had not been complied with. The Appeal Panel made orders varying the directions made, including for the provision of an agreed bundle. The time for the parties to file their submissions was adjusted however the hearing date was not affected. The Tribunal reserved costs of that directions hearing.
6. In relation to the preparation for hearing, the other thing that occurred was that on the day of the hearing the appellant filed the amended grounds of appeal which became MFI 1 in the appeal. This amended notice of appeal and the result of reducing and refining the issues to be resolved.
7. As is evident from our brief chronology, the proceedings were heard just over 4 months from when the appeal was filed. The date of the hearing was fixed by directions made 25 January 2018 and was not altered, despite non-compliance with the Tribunal's directions. The length of time taken to conclude the proceedings could not be said in any way to be prolonged by what has occurred.
8. The respondent says that it was required to obtain a transcript because the transcript prepared by the appellant was insufficient in some respects. We are uncertain as to what inaccuracies existed in the document prepared by the appellant. However, it seems from the submissions made to us that the respondent had, in any event, procured a copy of the transcript at its own expense prior to any issues concerning inadequacy arising. Where the Appeal Panel permits parties to type the transcript themselves, rather than incur the expense of having a formal transcript prepared, it is difficult to say that the fact of some inaccuracies, particularly when their significance is not known, is out of the ordinary. In this regard it was always open to the respondent to make any corrections to the transcript provided by the appellant without incurring the cost of having a formal transcript prepared.
9. The only administrative part of the proceedings that might be regarded as out of the ordinary was the fact that a second directions hearing was required because the appellant had not complied with the directions made on 25 January 2018 by the due date, which was 1 March 2018. Consequently, it was necessary for the respondent to take steps to relist the matter and have an adjusted timetable put in place. This occurred in circumstances where, on the evidence contained in the affidavit of Ewa Pardy, the appellant had failed to reply to correspondence concerning non-compliance with directions.
10. Where parties are legally represented, the Appeal Panel can reasonably expect the lawyers to work together, respond to correspondence, and make suitable arrangements where default occurs so as to facilitate the just, quick and cheap resolution of the real issues in dispute. That is not to excuse parties from their obligation to comply with the Tribunal's directions, but rather to recognise that delay may occasionally occur in which case all parties should take steps and work cooperatively to ensure that the resolution of the proceedings is not unnecessarily delayed.
11. The nonresponse to correspondence is out of the ordinary and, in so far as there was a need for a directions hearing on 20 March 2018, we are satisfied the respondent should be entitled to recover its costs in relation to this aspect of the appeal.
12. The respondent also submitted that the amendment to the grounds of appeal and the failure of the appellant to withdraw its appeal following the correspondence of 23 January 2018 also made the present appeal out of the ordinary.
13. We do not agree. The appellant had a right of appeal on a question of law, and otherwise required leave to appeal. The appeal could not be described as hopeless or unarguable. There were significant factual matters which required close evaluation in determining whether independence was established. The fact the appellant was unsuccessful does not mean that the appeal should be categorised as frivolous, vexatious or otherwise misconceived or lacking in substance. The manner in which the appellant confined its grounds of final hearing, in the context of Counsel preparing for hearing, deciding what issue should finally be run before the Appeal Panel and in seeking to refine the matters to be determined is not, in the context of what occurred in this case, out of the ordinary.
14. Section 60(1) says that each party to proceedings in the Tribunal is to pay that party's own costs. This is the usual position which applies. While what occurred necessitating the directions hearing on 20 March 2018 might be described as out of the ordinary and warrant an order for costs, in the present case, we are not otherwise satisfied an order for costs should be made in respect of the proceedings as a whole.
15. The respondent's costs of the directions hearing should be paid by the appellant as agreed or assessed, on an ordinary basis

Orders

1. The Appeal Panel makes the following orders: 1. By consent, a hearing is dispensed with pursuant to s 50(2) of the Civil and Administrative Tribunal Act, 2013. 2. The appellant is to pay the costs of the respondent in respect of the directions hearing on 20 March 2018, such costs to be as agreed or assessed on an ordinary basis. 3. Save as provided in order 2, the respondent's application for costs is dismissed.

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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: 23 July 2018