Commissioner for Fair Trading v Sarkees (No 2)

1. The decision of Commissioner for Fair Trading v Sarkees [2025] NSWCATAP 134 (the appeal decision) dismissed an appeal against a decision of the Tribunal to grant a real estate licence to Ms Sarkees.
2. The Tribunal, upheld by the Appeal Panel, had set aside a decision of a delegate of the Commissioner for Fair Trading to refuse to renew the real estate licence of Ms Sarkees.
3. Ms Sarkees is the respondent in the appeal proceedings and was the applicant in the first instance proceedings, while the Commissioner for Fair Trading (the Commissioner) is the appellant in the appeal decision and was the respondent in the first instance proceedings.
4. Ms Sarkees seeks her costs of the appeal, having made an application for costs in the course of the appeal (the costs application).
5. On 13 June 2025, as part of the orders made determining the appeal, the parties were provided with an opportunity to file submissions as to costs, as well as an opportunity to identify whether they considered the matter of costs could be dealt with without a hearing under s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act). Ms Sarkees provided written submissions regarding costs on 4 July 2025 and written submissions in reply on 25 July 2025. The Commissioner provided written submissions on the costs application on 25 July 2025.
6. For the following reasons I have decided to exercise the discretion to make an order for costs of the appeal in favour of Ms Sarkees.

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. The onus to satisfy the Tribunal that there are special circumstances warranting an award of costs lies with the party seeking costs: Styles v Wollondilly Shire Council [2017] NSWCATAP 108. In this case, Ms Sarkees bears that onus.
2. Section 60(2) of the NCAT Act provides a discretion to the Appeal Panel to award costs if "satisfied that there are special circumstances warranting an award of costs". Those special circumstances are circumstances that are out of the ordinary and do not have to be extraordinary or exceptional: see Youssef v NSW Legal Services Commissioner (Costs) [2020] NSWCATOD 115 at [108] citing Commissioner for Fair Trading v Edward Lees Imports Pty Ltd (No 2) [2019] NSWCATAP 222 at [8]; see also Houda v Seraphim (Costs) [2025] NSWCATAP 188 at [8]. Section 60(3) provides factors the Appeal Panel may have regard to in deciding whether special circumstances exist that warrant an award of costs.
3. Where special circumstances are found to exist, the Tribunal "has a discretion to exercise in deciding what, if any, order should be made": Lisle v Courtney [2025] NSWCATAP 121 at [34]. Merely because one or more s 60(3) criteria are satisfied does not necessarily mean that costs should be awarded: see relevant principles articulated in The Owners - Strata Plan No 63731 v B & G Trading Pty Ltd (No 2) [2020] NSWCATAP 273 at [11]-[13]:

"However, it does not follow that a costs order should be made simply because one or more of the factors in s 60(3) are made out.

Even if satisfied that there are special circumstances, the Appeal Panel must further be satisfied that they are circumstances "warranting an award of costs" - Fitzpatrick Investments Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 103 at [21]; Youssef at [108].

The exercise of the discretion requires the Tribunal "to weigh whether those circumstances are sufficient to amount to 'special' circumstances that justify departing from the general rule that each party bear their own costs": BPU v New South Wales Trustee and Guardian (Costs) [2016] NSWCATAP 87 at [9]; Obieta v Australian College of Professionals Pty Ltd (2014) NSWCATAP 38 at [81]; Khalaf v Commissioner of Police [2019] NSWCATOD 178 at [29]; Alliance Motor Auctions Pty Ltd v Saman [2018] NSWCATAP 137 at [35]."

1. The Tribunal is to exercise the discretion fairly and reasonably "having regard to the circumstances of the particular case" (Brodyn Pty Ltd v Owners Corporation - Strata Plan 73019 (No 2) [2016] NSWCATAP 224 at [24]) judicially, having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs: Lisle at [35] citing eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48].
2. In Owners Corporation - Strata Plan 4521 v Zouk & Anor [2007] NSWCA 231 the Court of Appeal considered the former Consumer Trader and Tenancy Tribunal's power to award costs under strata legislation. The relevant provision at issue was similarly drafted to s 60(3)(e) of the NCAT Act, providing that a matter could be dismissed "if the application is frivolous, vexatious, misconceived or lacking in substance". His Honour Ipp JA stated (at [41] and [45]):

"[41] I do not think that other decisions construing the phrase "lacking in substance" (or similar phrases) in other statutes (or generally) are of assistance in determining its meaning. The words must be construed in the context of the Act, not other legislation.

...

[45]...It is in this context that the phrase "lacking in substance" must be understood. It would be inappropriate, given the extraordinary powers triggered by a finding that an application is lacking in substance, to attribute to the phrase a meaning other than "not reasonably arguable". That is, a meaning not dissimilar to "frivolous, vexatious, misconceived", the words which precede the phrase."

1. In Zucker v Burbank Montague Pty Ltd [2018] NSWCATAP 135 at [44] the Appeal Panel held that:

"... The expression "no tenable basis in fact or law" relates to the common law tests developed and applied in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 and General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125. For a claim to have no tenable basis in fact or law it must be so obviously untenable that it cannot possibly succeed: General Steel at 130. "Manifestly groundless" or "clearly untenable" are equivalent expressions..."

1. Further, in EEC v Federation Council [2023] NSWCATAP 186 at [19] the Appeal Panel considered s 60(3)(c) of the NCAT Act and authorities as to "no tenable basis in fact or law" as follows:

"In The Owners - Strata Plan 97383 v CLSM Pty Ltd [2022] NSWCATAD 59, at [22]-[27] the Tribunal reviewed authorities in which the meaning of "no tenable basis in fact or law" was considered. In DYH v Public Guardian (No 3) [2022] NSWCATAP 34, the Appeal Panel accepted, at [20]-[22] that "untenable" in the context of s 60(3)(c) of the CAT Act was "something like so weak as to be unarguable, rather than merely weak". In Dennis Family Corporation Pty Ltd v Casey CC (Red Dot) [2008] VCAT 691, it was accepted that "untenable" was stronger than "weak", and included cases which were "so weak as to be unarguable", "so weak" that they "should not be argued", or "so weak" that it would be "an abuse to seek to maintain" them. The Tribunal concluded, at [27] that "untenable" in the context of s 60(3)(c) of the CAT Act involved "a substantial disparity between the strength of one claim and the weakness of its competitor".

1. In determining the costs application, I have proceeded on the basis of the legislation and legal principles set out above.

1. The Commissioner contends Ms Sarkees' submissions both implicitly and expressly accuse her of serious misconduct such that an oral hearing of the costs application should occur. In reply submissions, Ms Sarkees denies making any such a submission and contends she relies only on the statutory factors set out in ss 60(c) and 60(e) of the NCAT Act to the effect that costs may be granted where the merit of a claim is weak with no tenable basis in law, or that the proceedings were misconceived and lacking in substance.
2. In the circumstances where the appeal was brought only on questions of law and involved no consideration of fresh evidence or reconsideration; and given Ms Sarkees' clarifying reply submissions, and further, applying the guiding principle under s 36 of the NCAT Act, I am satisfied the costs application can be adequately determined in the absence of the parties, by considering their respective written submissions. Therefore, a hearing on the costs application is dispensed with under s 50(2) of the NCAT Act.

1. Ms Sarkees submits the appeal wholly lacked merit, relying on ss 60(3)(c) and 60(3)(e) of the NCAT Act, including on the basis that the grounds of appeal: were ill-conceived; were technical and pernickety points; failed to give proper regard to the decision as a whole; and that the points of law taken were not matters of broader principle. Ms Sarkees submitted that the appeal was vexatious, and the Commissioner raised points of law because she thought the outcome was 'arguably wrong'. Ms Sarkees also submitted that the Commissioner "sought to appeal a decision asserting grounds and effectively a state of affairs it knew was not run at first instance" and that the appeal was bound to fail.
2. Ms Sarkees submits appeal grounds 1, 2 and 4, in particular, were bound to fail in so far as they related to the Tribunal's reliance on the unchallenged psychological evidence, particularly because there was no application for adjournment to require the psychologist for cross-examination; no objection to tender of the psychological evidence; no suggestion of challenge of the psychological evidence during the cross-examination of Ms Sarkees; and no submissions of any concern were made at first instance as to relevance, weight or inconsistency of the psychological evidence.
3. Ms Sarkees submits that appeal ground 3 was ill-conceived, taking an isolated view, a "technical and pernickety approach", relying on a few words in one paragraph of the Tribunal's statement of reasons for decision when the Tribunal clearly understood the offence Ms Sarkees had committed which had been dismissed on mental health grounds. In respect of appeal ground 4, Ms Sarkees submits the ground hinged on two paragraphs of the Tribunal's written statement of reasons for decision when it is uncontroversial that judgments must be read as a whole and referred to the appeal decision.

1. The Commissioner submits nothing in the appeal decision suggested the Commissioner's grounds of appeal were "unarguable, untenable, frivolous, vexatious or otherwise lacking in substance" and further that the fact that Ms Sarkees had incurred costs does not of itself indicate circumstances out of the ordinary, citing Clarke v Bowen (No 2) [2019] NSWAP 230 at [9] (Clarke).
2. Regarding appeal grounds 1, 2 and 4, the Commissioner submits her claims turned on what the Commissioner contended were fundamental differences, in the nature of inconsistencies, within the psychological evidence before the Tribunal and that it was open for the Commissioner to argue the psychologist's reports were inconsistent and that it was arguable the psychologist's description of treatment was wrong or "misleading by omission".
3. In respect of appeal ground 1 the Commissioner further submits her arguments were based on properly identified evidence and the facts as the Commissioner understood them. The Commissioner also submits that if her arguments as to inconsistency of the psychological evidence had been accepted, the issue of adjournment or arguments before Tribunal at first instance would have been irrelevant.
4. The Commissioner also submits, regarding appeal ground 2 (and consequently 4) that if the Appeal Panel had accepted the Commissioner's view of the psychological evidence, the Commissioner's arguments supporting those grounds would arguably have succeeded, contending that while the Appeal Panel had assessed the psychologist's evidence the Tribunal at first instance had not.
5. In respect of appeal ground 3 (and, consequently appeal ground 4 also) the Commissioner's submission is that such ground was plainly arguable, referring to the appeal decision, at [90], and that it was open to the Commissioner to challenge the Tribunal's findings based on the Tribunal's reasons.

1. The Commissioner relied on four appeal grounds, all questions of law, set out at [20]-[23] of the appeal decision which can be summarised as:

(1) the Tribunal failed to afford appellant procedural fairness to the Commissioner;

(2) the Tribunal's reliance on evidence of a psychologist was legally unreasonable;

(3) the Tribunal's finding in relation to a criminal offence was not legally reasonable; and

(4) the Tribunal failed to comply with s 62(3)(c) of the NCAT Act when providing a written statement of reasons.

1. The Appeal Panel found that each of the appeal grounds was not made out. The Commissioner was wholly unsuccessful, and therefore Ms Sarkees was successful, on appeal.
2. In respect of appeal ground 1 relating to procedural fairness, the Appeal Panel determined (at [36]-[37] and [50]-[51]):

"[36] In the context where both parties are represented by experienced counsel, it is difficult to see how the Tribunal failed to afford procedural fairness to the appellant by reliance on the 2024 psychological reports, in the circumstances of this case. The appellant did not raise any issue about the reliability of the reports, nor the credibility of the report's author. There was no submission put that there was any reason why the evidence of the psychologist in the 30 April 2024 report (or in the earlier 9 February 2024 report) should not be accepted.

[37] Moreover, given the lack of objection to the admission of the 2024 reports (or indeed any submission that put the Tribunal on notice that the appellant considered there were "shortcomings" with the 2024 reports), prima facie, there was no basis for the Tribunal not to accept and rely on the unchallenged evidence of the psychologist in those 2024 reports.

...

[50] The appellant made no submissions (whether in written submissions prior to the hearing, or in oral submissions at the hearing) about any issues arising from the psychologist's reports in evidence before the Tribunal, indeed it is not apparent that any submissions were made at all about the respondent's mental capacity.

[51] During the hearing, counsel for the appellant questioned the respondent about her application to the Local Court, in 2023, under s 14 of the Mental Health Forensics Provisions Act and her treatment plan under the care of the psychologist. Counsel asked some questions of the respondent about the stressors that underlaid her diagnosis in the 2023 psychologist's report and the progress she had made in the course of treatment. In the course of that cross-examination, and in answer to a question about how she would assess her mental health now, as compared to 12 months ago when she started treatment with the psychologist, the respondent gave evidence about her "much better" mental health and the coping mechanisms or skills she had developed to deal with stressors (personal or professional) (Tcpt, p 63). Counsel for the appellant made no closing submissions which cast doubt on the respondent's oral evidence about her mental health or mental capacity (Tcpt, p 76). Counsel for the appellant made no closing submissions about the respondent's mental health or mental capacity, or any of the psychological evidence before the Tribunal in the form of the three reports we have referred to.

[52] We are satisfied there was no denial of procedural fairness because no circumstances have been demonstrated to disturb the prima facie conclusion that there was no basis for the Tribunal not to accept and rely on the unchallenged evidence of the psychologist."

1. In respect of appeal ground 2 relating to legal reasonableness of the Tribunal relying on psychological evidence, the Appeal Panel determined (at [73]-[74]):

"We do not think it is necessary to look behind the 2024 reports to the earlier 2023 report. There is nothing inherently illogical or irrational about those 2024 reports in the context of Mr Attai being her treating psychologist. If we are wrong and it is incumbent on us to review that earlier evidence (the 2023 report), then we have done so, and we do not consider there to be the inconsistency asserted by the appellant.

Insofar as the appellant says that the psychologist, in his 2024 reports, misstated the respondent's 2023 diagnosis (as described in his 22 July 2023 report), we are unable to agree. The appellant made no submission to the Tribunal that the psychologist misstated a diagnosis made in 2023 in either of his later 2024 reports. We agree with the respondent's submission that a close analysis of the 22 July 2023 report shows the psychologist was treating the respondent for stress-related issues which underpinned her diagnosis and there was no misstatement of diagnosis in the later 2024 reports."

1. The Appeal Panel had earlier assessed the psychological evidence when considering appeal ground 1 relating to procedural fairness (at [42]-[49] of the appeal decision) and determined there was "no demonstrated contradiction or inherent inconsistency in that evidence" (at [49]).
2. Following an analysis of the Tribunal's reasons for decision, in respect of appeal ground 3 relating to legal reasonableness of the Tribunal's finding as to a criminal offence, the Appeal Panel determined (at [90]-[93]):

"While a specific cross reference to one or more paragraphs within the Reasons would have been of assistance to the reader, detail and particularisation of criminal activity provided in the Reasons is only located at [9] of the Reasons, at which reference is made to "allegations". It is noted the Tribunal at [37] of the Reasons uses the word "allegations", the same word used in [9] of the Reasons.

In those circumstances, we are satisfied the reference to "criminal activity outlined above" in the last sentence of [39] of the Reasons is a reference to the allegations against the respondent set out in [9] of the Reasons (and in the opening words of [37] where the Tribunal said "With respect to the allegations brought against her...").

We therefore do not consider that the last sentence of [39] of the Reasons constitutes a finding that the respondent was not guilty of the criminal offence in relation to which she had made admissions. We reject the appellant's contention that the Tribunal made a finding at [39] of the Reasons that the respondent was not guilty of any criminal conduct. We agree with the respondent's submission that the expression "engaged in the criminal activity outlined above" is a reference to the "criminal activity" detailed at [9] of the Reasons.

Given that we do not consider that the Tribunal made a finding that the respondent did not commit the "ought reasonably to know" offence (offending conduct which she had admitted to), the Tribunal's finding in respect of the respondent's conduct was not legally unreasonable."

1. Appeal ground 4 was that the Tribunal failed to comply with the statutory requirement in s 62(3)(c) of the NCAT Act to outline its reasoning processes in reaching its findings contained in two paragraphs of the Tribunal's written statement of reasons. The Appeal Panel found there was no demonstrated breach of s 62(3)(c) of the NCAT Act in respect of the Tribunal's finding in either paragraph, in the circumstances.

1. I agree with the submission of the Commissioner that the fact Ms Sarkees has incurred costs does not itself indicate circumstances out of the ordinary: see Clarke at [9]. Nor does Ms Sarkees' success on appeal necessarily amount to special circumstances (see Youssef at [107]), as was found to be the case in the Tribunal's determination as to costs at first instance: Sarkees v Commissioner for Fair Trading [2024] NSWCATOD 194.
2. The Commissioner was legally represented, in this case by counsel, and as such does not get the benefit of any tolerance that may be granted to self-represented litigants who may not understand legal concepts when considering exposure to costs orders: see Gokani-Robins Pty Ltd v The Owners - Strata Plan No 77109 (No 2) [2025] NSWCATAP 204 at [33].
3. Ms Sarkees submits the Commissioner did not conduct herself in the proceedings in accordance with the "Model Litigant Policy". While s 60(3)(g) of the NCAT Act permits the Tribunal to have regard to "any other matter that the Tribunal considers relevant", I consider in this case only the ss 60(3)(c) and 60(3)(e) statutory factors, as put forward by Ms Sarkees, are relevant to determination of the costs application and therefore do not consider such policy of relevance in the exercise of discretion in this case.
4. Further, as mentioned above (at [16]-[17]), while the Commissioner submitted Ms Sarkees' submissions both implicitly and expressly accuse her of serious misconduct, I accepted Ms Sarkees's clarifying reply submission denying any such a submission, in part because of the conclusion in the preceding paragraph that determination of the costs application will not go beyond conduct in respect of the ss 60(3)(c) and (e) statutory factors put forward by Ms Sarkees.
5. Appeal ground 1 was based on a claim of procedural unfairness and I am unable to accept the Commissioner's submissions as to this ground, summarised above, because no basis existed to make such a claim.
6. Pertinent consideration of matters of adjournment and argument, that may have, or have not, occurred during a hearing are clearly relevant to a procedural fairness ground, as observed in the appeal decision at [18] (citing Donohoe v Albulario [2025] NSWSC 9 at [33]). Of relevance to the appeal, was that the psychological evidence was unchallenged at first instance and the Commissioner, represented by counsel at first instance, made no submissions or raised any matter relevant to the substance of the claim underlying the ground.
7. Further, the Appeal Panel took the additional step of assessing the psychological evidence (at [42]-[49] of the appeal decision) and concluded there was no inconsistency as contended by the Commissioner on appeal.
8. In all the circumstances I therefore consider the Commissioner's claim underlying appeal ground 1 was weak and was not reasonably arguable because there was no basis upon which to assert any procedural unfairness, as argued, had occurred. It follows that appeal ground 1 was lacking in substance.
9. Applying General Steel, and on the same basis, I am further satisfied appeal ground 1 also had no tenable basis in fact or law, particularly given the lack of factual basis upon which to make the claim underlying that ground.
10. Consistent with the assessment of appeal ground 1 above, on the same basis, I also consider the Commissioner's arguments as to appeal ground 2 were not reasonably arguable, including because there was no demonstrated inconsistency or illogicality in the unchallenged psychological evidence and no basis existed to claim legal unreasonableness regarding the Tribunal's reliance on that unchallenged evidence. As a result, appeal ground 2 also lacked substance.
11. The Commissioner's claim underlying appeal ground 3 was misconceived because the Tribunal made no finding of the nature claimed by the Commissioner and it was clear the Tribunal understood the relevant conduct at issue, as discussed in the appeal decision (at [80]-[81]).
12. Further, the Commissioner's claim underlying appeal ground 4 was also misconceived. The Appeal Panel found that there had been no significance to any failure of the Tribunal to distinguish, in express terms, between two reports prepared in 2024 which, it noted (appeal decision at [111]) were not in contest. The Commissioner's ground, founded on a claim as to adequacy of reasons, was therefore not properly open to argument in the circumstances.
13. Therefore, on the appeal, the Commissioner was wholly unsuccessful, relying on grounds that within the meaning of ss 60(3)(c) and (e) were weak, lacking in substance or misconceived, as well as one ground that had no tenable basis in fact or law. Having regard to all of the above, in exercising the discretion to determine costs I am satisfied Ms Sarkees has established that special circumstances exist and that an award of costs is warranted.
14. Section 60(4) of the NCAT Act provides discretion for the Tribunal, including the Appeal Panel, in an award of costs to determine the basis upon which costs are to be assessed and paid. In exercising such discretion, in all the circumstances, I consider the costs of the appeal should be awarded to Ms Sarkees on the ordinary basis.
15. The Commissioner will therefore be ordered to pay Ms Sarkees' costs of the appeal as agreed or assessed.

(1) Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) a hearing of the application of the respondent for costs of the appeal is dispensed with.

(2) The appellant is to pay the respondent's costs of the appeal on the ordinary basis as agreed or assessed under the Legal Profession Uniform Law Application Act 2014.

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.