Chan v Commissioner of Fair Trading

The Respondent's submissions

1. The Respondent's submissions focus on factors relating to the way the proceedings were conducted by the Appellant that would justify the making of an exception from the primary rule. In particular the Respondent relies on the provisions of section 60(3)(c), (d), (e) and (g) of the NCAT Act.
2. In the Respondent's submission, the proceedings were entirely futile. The Respondent submits that there doesn't appear to have been any rational reason for Yammatree to bring these proceedings because there was no order that the Tribunal could properly have made in respect of the Refusal or Cancellation that would have had any effect on Yammatree's operation or its mob.
3. Further, in relation to the compensation claim, it submits that the Tribunal found that there was no proper basis for it to award any compensation. Thus, even if Yammatree had succeeded in its appeal against the Cancellation, there was no proper basis for the Tribunal to award any compensation.
4. The Respondent points to paragraph [160] and paragraphs [165] - [169] of the primary decision in support of its submission that Yammatree's case lacked any tenable factual basis. It says that there are no identified factual matters that meant Yammatree had good prospects of succeeding.
5. The Respondent does not submit that the proceedings were frivolous or vexatious. However, it submits that they were otherwise misconceived or lacking in substance.
6. The Respondent points to correspondence between the parties in which the Respondent invited Yammatree to reconsider its position on the basis that it had no prospects of success should the matter go to hearing and that it was otherwise a waste of public resources. In a letter of 1 September 2014 the Respondent's solicitors invited Yammatree to withdraw its application and that the matter be settled on the basis that each party bear its own costs. Yammatree declined that offer.
7. The Respondent submits that Yammatree's refusal to walk away from the proceedings on the terms offered demonstrates its unreasonable and irrational position for the continuance of the proceedings.
8. By a letter dated 13 April 2015 the Respondent advised Yammatree of its intention to seek costs and its grounds for doing so, and queried whether Yammatree was prepared to pay all or any of those costs. Yammatree's solicitors responded on 6 May 2015 and refused the Respondent's request.
9. The Respondent seeks an order that Yammatree pay its costs of and incidental to these proceedings such costs, in the event they cannot be agreed, to be assessed in the manner set out in section 60(4)(b) of the NCAT Act. It submits that there should be no allowance for any 'success' on the nature of the appeal question given that on any basis, the proceedings were otherwise futile and lacking in any merit.

The Appellant's submissions

1. The Appellant submits that the Respondent's costs application should be dismissed on the basis that the Respondent points to no special circumstance that would dissuade the Tribunal from the ordinary position set out in subsection 60(1) of the NCAT Act. It denies that it ran its case in any way that disadvantaged the Respondent or that it was in any way responsible for unreasonably prolonging the time taken to hear the case.
2. The Appellant also raised the argument that the Respondent did not make its costs application in a timely manner and therefore Yammatree was entitled to assume that the litigation had been finalised.
3. In response to the Respondent's contention that there was no tenable basis in fact and/or law for its appeal, the Appellant points to paragraph [20] of the primary decision and its success on the jurisdiction question.
4. The Appellant also submits that there were factual question that the Tribunal needed to be resolved in order for any determination to be made in relation to the Cancellation. The success of Yammatree's claim for compensation was always dependent upon it succeeding on its arguments in relation to the Cancellation.
5. It further submits that the Respondent's contention that the proceedings were misconceived or lacking in substance fails to engage with the link between the compensation claim and the cancellation claim.

Consideration.

1. In this instance I am satisfied that the factors mentioned are of sufficient significance to justify a finding of special circumstances.
2. In my view, the Appellant continued to prosecute the proceedings in circumstances where it should have become apparent that the proceedings were futile. In doing so, it contributed to the Respondent incurring unnecessary costs.
3. I accept that the Appellant was entitled to challenge the Refusal and the Cancellation decisions. However, from the time that the Respondent had served its material it should have been apparent that Yammatree's prospects of success were minimal at best. This was ultimately borne out in the final determination.
4. In a letter of 1 September 2014, the Respondent invited Yammatree to withdraw its application and that each party bear its own costs. From that time the Appellant was on notice that the Respondent would be seeking costs if the Appellant was unsuccessful at the hearing.
5. I consider that formal offers of compromise and offers to settle fall within the scope of "other matter that the Tribunal considers relevant" for the purposes of subsection 60(3)(g) and are matters to be weighed up in the balance.
6. I note the Appellant's submission that it was successful on the jurisdictional question. However, that does not alter my view that the proceedings were futile.
7. I also note the Appellant's submission that the Respondent did not make its costs application in a timely manner. This is a consideration set out in in section 60(3)(f) of NCAT Act in determining whether special circumstances exist warranting the award of costs: see Chan v Commissioner of Fair Trading [2015] NSWCATAD 62. There is an obligation under the Guiding Principle set out in section 36 of NCAT Act "to facilitate the just, quick and cheap resolution of the real issues in the proceedings" and in such a way that "the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings."
8. The Respondent's costs application was lodged on 3 June 2015 and the Tribunal's decision was finalised on 11 March 2015. It is arguable that the Respondent has elongated proceedings by bringing of the costs application at that time. However, when the chronology of events is taken into account, I do not consider it to be such an unreasonably long period so as to prevent an award of costs.
9. I note that the Respondent informed Yammatree of its intention to seek costs and its grounds for doing so within about a month of receiving the decision. It had previously put Yammatree on notice of its intention to seek cost in the event that Yammatree was unsuccessful in the appeal. The Respondent's costs application was lodged with the Tribunal within a month of receiving notice from Yammatree that it was not prepared to contribute to the Respondent's costs.
10. The ordinary principle that each party bear their own costs is the predominant consideration in the Tribunal's exercise of the costs discretion. There must be special circumstances that warrant a departure from that position.
11. In my opinion, the factors that the Respondent has identified, coupled with the offer to settle outweigh the considerations that the Appellant has identified and in my view there are "special circumstances warranting an award of costs" in favour of the Respondent.
12. Having reached that conclusion the next question is: how are costs to be assessed? Section 60(4) allows the Tribunal to determine by whom and to what extent costs are to be paid. In this case I determine that the Appellant should pay the Respondent's costs of the proceedings from the time it received the Respondent's letter of 1 September 2014.
13. Section 60(4)(b) permits the Tribunal to 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.
14. In my view, that is the appropriate approach to be taken in this matter.

Order That the Appellant is to pay the Respondent's costs of the proceedings from the time it received the Respondent's letter of 1 September 2014, as agreed between the parties or as assessed. 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: 22 October 2015