Commissioner for Fair Trading v PSMG Pty Ltd (No 2)

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.

(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.

1. In addition to all the material that was before us on the original appeal we had submissions and materials received from the parties on the costs issues. These consisted of:

(1) Submissions and supporting documents filed by the respondents on 27 March 2025.

(2) The administrator's submissions together with the affidavit of Aiman El Roubi (in support of the application that the respondents pay the administrator's costs of the costs application) filed 11 April 2025.

(3) The respondent's submissions in reply filed 16 April 2025.

Should the application be determined without a hearing?

(2) The Tribunal may make an order dispensing with a hearing if it is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Tribunal.

(3) The Tribunal may not make an order dispensing with a hearing unless the Tribunal has first:

(a) afforded the parties an opportunity to make submissions about the proposed order, and

(b) taken any such submissions into account.

(4) The Tribunal may determine proceedings in which a hearing is not required based on the written submissions or any other documents or material that have been lodged with or provided to the Tribunal in accordance with the requirements of this Act, enabling legislation and the procedural rules.

1. In this case both parties have indicated their agreement to the costs applications being determined on the papers. Having reviewed all the materials we are satisfied that this is matter that can be determined in the absence of the parties by considering the materials lodged by them. We therefore dispense with a hearing.

1. In considering the costs issue we have assumed a familiarity with our decision in Commissioner of Fair Trading v PSMG Pty Ltd [2025] NSWCATAP 34, which should be read with this decision.
2. It was an interlocutory appeal against a decision of the Tribunal to stay a decision of the administrator to cancel the respondent's licences under the Property and Stock Agents Act 2002 (NSW) (PSA Act) and to disqualify them for 10 years. After the administrator made those decisions, and before the Tribunal made its stay order, the administrator appointed a manager to conduct the strata management business run by the respondents. This complicated matters before the Tribunal by raising questions concerning the public interest and the interaction between the disciplinary provision, the Tribunal's power to make stay orders, and the administrator's power to appoint a manager to the business.
3. As with all interlocutory appeals, the administrator required leave to appeal. Leave was granted in the face of strong opposition from the respondents, including arguments going to the law applicable to the granting of leave, in which the respondents did not prevail. Leave was granted because questions of considerable importance to the public interest and to public administration were raised by the appeal.
4. The Appeal Panel found a number of errors of law had been made by the Tribunal which resulted in the stay application being reconsidered on appeal. For the reasons given by the Appeal Panel which were, in parts, similar to but not the same as those given by the Tribunal below, a stay order was made on the appeal. That order we made was in a form which the parties had originally agreed to in written submissions, but which the respondents refused to consent to amending it to at the commencement of the appeal hearing.
5. It is also to be noted that in the appeal:

(1) We rejected the respondent's submission that in considering granting leave to appeal form an interlocutory decision that the requirements the appellant to demonstrate an error of principle and a risk of substantial injustice are necessarily cumulative.

(2) We rejected the administrator's contention that the Tribunal applied the wrong test in determining whether to make orders affecting the operation of the administrative decision by asking "whether the interim order [made by Principal Member Simon on 26 July 2024] should continue".

(3) We rejected the administrator's submission that the Tribunal had misconstrued the public interest, accepting the respondent's submissions to the contrary.

(4) We accepted the administrator's submission that the Tribunal had failed to have due regard to a mandatory consideration, being the administrator's submissions regarding the seriousness of the respondents conduct. In doing so, we rejected the respondents submissions that there was no obligation to consider the seriousness of the alleged conduct.

(5) We accepted the administrator's submissions that the Tribunal had failed to address issues of law and statutory interpretation raised in submissions.

(6) We rejected the administrator's submission that the Tribunal had purported to review the administrator's appointment of a manager accepting the respondent's position that this was not the case.

(7) We accepted the respondent's submissions that the Tribunal was entitled to take into account factors relating to the manager's qualifications to conduct a strata management business, and the cost thereof, when assessing the public interest.

(8) Near the conclusion of the hearing the following interchange occurred between the Appeal Panel and counsel for the administrator (T36.296):

Senior Member Molony: ... And the second question is really one to Miss Douglas-Baker that perhaps I should have asked earlier, but it only clarified itself in my head just now. And that is, I understand what you're saying is wrong with the decision.

You haven't specifically addressed, I think, is how it's related to substantial injustice to your client.

Douglas Baker: Well, the substantive injustice addressing that consideration for leave is that this establishes what will ultimately in the practice of the tribunal become persuasive of the way in which the appointment of a manager is to be dealt with. And in the first instance, it's the appellant submission that's an incorrect principle.

But in the second instance, it plainly creates a situation where both sides incur costs agitating the correctness of a decision. And the injustice is perhaps not confined to this case, which we say is wrongful because of the reasons l've addressed, I won't repeat them. But that the injustice will be occasioned by this being taken up in future cases.

And it's the peculiar situation of a statutory agency or a government agency or a minister having responsibility for administering a legislative scheme. And the commissioner does recognise that he or she has responsibilities to administer the scheme according to law and to not go beyond the scope of power that's conferred. The tribunal, of course, stands in the commissioner's shoes making a new decision on the merits.

It's unfortunate in this particular situation that PSMG and Mr Wang are caught up by virtue of it being the first instance of a matter raising these issues. But it does have ongoing significance for the commissioner. And this is where the injustice lies.

The commissioner needs to know how this should be approached, if its submissions are accepted as to the correct approach. But equally, it does have implications for future cases. And the question of not capturing future parties in costs that need not be expended if there's an authoritative statement.

It's an unusual submission, I appreciate, but we're conscious of the role that we have is beyond each individual case.

1. The parties differ as to whether and how each of them were successful on the appeal. While the result achieved on appeal was substantially the same as that reached by the Tribunal below, that result was only reached after a full reconsideration of the facts based on a different understanding of the law. The administrator succeeded in gaining leave to appeal and then on issues of law, while the respondents succeeded on the facts. The respondent's actively opposed the granting of leave and joined issue with the administrator in the appeal. We do not accept that either party can be said to have been successful on the appeal, although we agree that the ultimate outcome was to the benefit of the respondents.

Are there special circumstances warranting an order for costs of the appeal?

1. To make an order for costs under s 60 the Tribunal is required to find special circumstances having regard to the factors in s 60(3). We shall consider each separately

Unnecessarily Disadvantaging Another Party - s 60(3)(a)

1. The respondents submit that the administrator pursued what amounted to a "test case", the ultimate outcome of which had limited practical effect (the correction of a typographical error), but which had the very real consequence of involving them in prolonged and costly proceedings. This is said to have exposed them to an unfair disadvantage. They emphasize that a government agency with deep resources should not cause a private party to bear undue litigation costs for an appeal which the respondents says was essentially misconceived and achieved no substantive result.
2. The respondent relied on the decision of A Goninan & Co Ltd v Gill [2001] NSWCA 77 (Goninan), for the proposition when one party is effectively "dragged into" proceedings because another party is testing a legal proposition, it constitutes clear evidence that the conduct created an unnecessary disadvantage for the side dragged in.
3. The administrator maintains that its actions were justified by public interest considerations, including its legitimate concerns about the risk posed to the public if the respondents continued to operate their business. The appeal was not an attempt to disadvantage the respondents, but was aimed at protecting the public interest, as well as addressing broader regulatory and procedural issues.
4. In Goninan there was no reference to unnecessary disadvantage. It was an appeal that was decided in an environment in which the usual rule was that costs follow the event rather than each party bearing their own costs. It was a test case regarding whether a worker in workers compensation proceedings (who could not ordinarily be ordered to be paid the costs of proceedings) could be ordered to pay the costs of a costs assessment. It was found that the worker could be ordered to do so, The Court of Appeal ordered the insurer, to whom the test case was of considerable importance, to pay the worker's costs. Heydon JA explained at 459:

The appropriate costs order is that the company pay the worker's costs. It is appropriate because the company's application for leave to appeal was granted and the appeal considered by Bishop CCJ, and the company's application for leave to appeal was granted and the appeal considered by this Court, on the basis that the case was a test case. The case was designed to test the correctness of the line of authority in the Compensation Court. It was thus of general importance to the insurer behind the company, and to other insurers behind employers in the position of the company, but of no significance whatever to the worker. The costs of the appeal must far exceed the $542.50 in dispute. The proceedings were thus of considerable potential benefit to the company and its insurer, but of no benefit, and much potential detriment, to the worker. Further, and less importantly, there was a degree of vacillation and wavering on the company's part in relation to what orders it sought, both before Bishop CCJ and this Court, for which the worker was not responsible. In all the circumstances the company should pay the worker's costs despite the failure of the worker's argument. For the same reasons Bishop CCJ's order that the company pay the worker's costs of the proceedings before him should not .e disturbed

1. This is to be contrasted with the circumstances in this case, where the respondents had a real interest in the outcome of the appeal and actively participated in every aspect of both the application for leave to appeal and the appeal itself. The case was one in which there was real prospect that the Appeal Panel may have reached a different result regarding the stay order, than that reached by the Tribunal. It was not set up and run as test case in an environment where costs follow the event. Both parties had a real stake in the outcome of the appeal, albeit the administrator's was somewhat wider and included securing a regulatory understanding that concurred with its own.
2. We are not persuaded that the respondents were actively disadvantaged by the appeal or the manner in which the administrator pursued it.

Did the administrator unreasonably prolong the time taken to complete the proceedings - s 60(3)(b)

1. The proceeding referred to in the sub-section are these appeal proceedings. There is no evidence that they were unreasonably prolonged. Similarly, there is nothing to suggest that the hearing of the respondents' administrative review application was delayed by the appeal.

The relative strength of the claims and whether the appeal had no tenable basis - s 60(3)(c).

1. The respondent's assert that the administrator appeal was weak and not brought on tenable basis.
2. We would not have granted leave to appeal if that were the case. The administrator's appeal points with respect to errors of law made by the Tribunal were substantially successful.

The nature and complexity of the proceedings - s 60(3)(d).

1. The respondents submitted that because of the complexity of the issues in dispute and the large volume of material relied on by the administrator, the nature and complexity of the case is such that they constitute special circumstances justifying the making an order for costs. The respondents relied on a first instance decision of the Consumer and Commercial Division of the Tribunal in The Owners - Strata Plan No. 64807 v Sunaust Properties Pty Ltd (No. 2) [2022] NSWCATCD 40 where the Tribunal said:

29. The Tribunal is satisfied that the nature and complexity of the proceedings was such as to warrant a finding that there were special circumstances in this case. That finding is based on the volume of documents, the number of witnesses, the number of factual aspects requiring consideration, the extent of the written and oral submissions, and the legal issues raised, notably the question raised by the respondent as to whether s 72 of the SSMA applied.

1. In contrast, this was an appeal. In appeals matters of greater legal complexity often arise. The material provided by the agency, while bulky, was that usually required in an appeal. No witnesses were called. The nature and complexity of the appeal in this case is not a special circumstance for the purpose of s 60(2).

The proceeding were misconceived, lacking in substance and vexatious - s 60(3)(e).

1. The respondents submit that special circumstances exists as the appeal was without merit and vexatious because they were:

(1) An abuse of process in that the administrator's true purpose in commencing the proceedings was to obtain an advisory opinion.

(2) "Instituted to harass, annoy and cause detriment" to the respondents.

(3) "Instituted and pursued without reasonable grounds."

(4) "Conducted to achieve a wrongful purpose" being obtaining an advisory opinion.

1. The administrator takes issue with each of these allegations. We see no benefit in summarising those submissions.
2. The respondent's argument is predicated on the respondent's understanding of one submission made by the administrator's counsel (extracted at par 13(8) above) as constituting an admission that the administrator's only reason for appealing was to clarify the law for future use. We did not understand the administrator's counsel to say that, and in submissions the administrator takes issue with that understanding. We accept that the administrator was appealing against the decision of the Tribunal in order to challenge it and the legal understanding of the Tribunal when reaching it.
3. We do not accept the submission that the appeal was instituted or pursued unreasonably, was intended to harass or annoy, was an abuse of process or was brought vexatiously.

Other Matters - the Model Litigant Policy for Civil Litigation - s60(3)(g).

1. The respondent's submit that the administrator breached the Model Litigant Policy for Civil Litigation in NSW (Premier's Memorandum M2016-03). It is alleged that the administrator breached the policy by:

(1) Failing to avoid unnecessary litigation.

(2) Pursuing an appeal in the absence of reasonable prospects of success or justification with respect to the public interest.

(3) Taking advantage of the respondents who did not have the same financial resources as those available to the administrator.

1. The administrator disputes each of these submissions.
2. In our view the fact that we saw fit to grant leave to appeal, because questions of considerable importance to the public interest and to public administration were raised by the appeal, answers these submissions. Further, the appeal was successful with respect to some of those issues. We do not accept that the administrator commenced the appeal proceeding with no reasonable prospects of success. While we accept that the financial resources of the administrator were greater than those available to the respondents, this is not a case where the respondents were impecunious and without financial resources of their own. A fundamental part of their case was the maintenance and protection of their business, which had a substantial value.
3. We do not accept that the administrator breached the Model Litigant Policy for Civil Litigation.

1. We are therefore not satisfied that any circumstances exist that constitute special circumstances for the purposes of s 60(2). In accordance with s 60(1) each party is to bear their own costs.

Are there special circumstances warranting an order for costs in favour of the administrator for Its cost of the costs application?

1. The administrator says that the respondents should be ordered to pay its costs of the costs application because, briefly put:

(1) The administrator has been unnecessarily disadvantaged by having to respond to a weak costs application - s 60(3)(a).

(2) That by applying for costs the respondents have unnecessarily prolonged the proceedings - s 60(3)(b).

(3) The respondent's costs claim was weak, lacking a factual basis or a legal foundation - s 60(3)(c).

(4) The respondents have made a costs claim that has no tenable basis in fact or law and is misconceived - s 60(3)(c).

(5) By making an untenable costs application the respondents have failed to comply with their duty under s 36 of the NCAT Act to facilitate the just, quick and cheap resolution of the appeal.

1. We do not accept that the respondent's application was untenable. They had a "test case" argument going to the administrator's purpose in pursing the appeal, which, if accepted, may have led to special circumstances being found. It was not a strong case and has been rejected by us. It was not however, untenable and entirely without merit. While not strong, it was not a weak case to the extent that a finding of special circumstances under s 60(3)(c) is warranted. We do not accept that applying for costs, in these circumstances, has unnecessarily prolonged the proceedings.
2. The administrator's also takes issue with the respondent's submissions alleging impropriety by the administrator's representatives in the conduct of the proceedings, suggesting that the allegations are unjustified. This is not a ground for finding special circumstances warranting a costs order.
3. We are not satisfied that there are special circumstances justifying an order for costs in favour of the administrator for Its cost of the costs application.

(1) A hearing of the costs application is dispensed with.

(2) Each party to the appeal and costs application is to pay their own costs.

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.