Cripps v G & M Dawson Pty Ltd

Should the application for costs be determined by one member?

1. Section 27(1) of the NCAT Act provides that (except for certain proceedings not relevant to this decision) the Tribunal is to be constituted by one or more Division members of the Division to which the function of dealing with the proceedings is allocated.
2. Schedule 6 to the NCAT Act excludes ancillary or interlocutory decisions from the definition of substantive Division functions, which must be heard by three Division members unless they fall within the specified exceptions. Ancillary or interlocutory matters may be determined by one or two members.
3. It follows, therefore, that provided the application for costs is an ancillary or interlocutory matter, it can be heard by a single member of the Division.
4. Section 4(1) of the NCAT Act states that a decision concerning the awarding of costs in proceedings is an ancillary decision of the Tribunal.
5. I am satisfied that the application for costs can be determined by a single member of the Tribunal.

Should the application for costs be determined on the papers?

1. Section 50 of the NCAT Act provides that 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.
2. As noted above, the parties were invited to provide their views about whether a hearing should be dispensed with and the application for costs determined on the papers.
3. In submissions in reply lodged on behalf of the costs respondents on 8 February 2024 it is stated that: "It is agreed that the cost application be dealt with by way of written submissions unless the Tribunal otherwise orders a hearing date."
4. In paragraph 33 of the submissions in reply lodged on behalf of EKC on 22 February 2024 it is requested that a hearing on costs be dispensed with and the application for costs be determined on the papers.
5. In deciding whether to exercise the discretion to dispense with a hearing, the Tribunal must: 1. Take such measures as are reasonably practicable to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings: NCAT Act, s 38(5)(c); 2. Facilitate the resolution of the issues between the parties 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: NCAT Act, s 36(4); and 3. Give effect to the 'guiding principle' of the NCAT Act that the Tribunal is to facilitate the just, quick and cheap resolution of the real issues in the proceedings: NCAT Act, s 36(1).
6. The issues raised by the cost applications are not complex and the conduct of a hearing would result in the parties incurring additional costs and the Tribunal expending greater resources. Those costs would not be proportionate to the complexity and importance of the issue to be resolved.
7. The parties both provided detailed written submissions and I am satisfied that the costs applications can be determined adequately by considering those submissions.
8. A hearing of the application for costs is dispensed with under s 50(2) of the NCAT Act.

The applicable law

1. In all divisions of NCAT, including the Guardianship Division, the starting point is that each party is to pay its own costs (subject to exceptions that are not relevant in this matter): NCAT Act, s 60(1).
2. Section 60(2) of the NCAT Act, however, provides the Tribunal with the discretion to award costs where it is satisfied that there are 'special circumstances' that warrant an award of costs.
3. Section 60(3) of the NCAT Act specifies the factors to which the Tribunal may have regard in determining whether there are special circumstances warranting an award of costs. They are: 60 Costs … (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 strength 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. In making decisions, the Tribunal is required to have regard to the general principles set out in s 4 of the Guardianship Act 1987 (NSW). The principles are that: 4 General Principles … (a) the welfare and interests of persons who have disabilities should be given paramount consideration; (b) the freedom of decision and freedom of action of such persons should be restricted as little as possible; (c) such persons should be encouraged, so far as possible, to live a normal life in the community; (d) the views of such persons in relation to the exercise of functions under the Act should be taken into consideration; (e) the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised; (f) such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs; (g) such persons should be protected from abuse, neglect and exploitation; and (h) the community should be encouraged to apply and promote these principles.

The history to the proceedings

1. In the guardianship and financial management applications, it is stated that the costs respondents were concerned for their grandfather's safety and wellbeing while he was in HBC's care.
2. Details of the family relationships and history were provided in lengthy statements lodged by the original applicants with the applications. It is reported that EKC was a father figure to them because the children lived with their mother at their grandparents' home following the divorce of their parents. It is alleged that EKC provided significant financial and other support to the original applicants and that following the death of EKC's wife in 2007, EKC's daughter, Ms Z, cared for EKC (with whom she was already residing).
3. Following the death of Ms Z in 2021, NBN, one of the original applicants who had lived with his grandfather for 20 years, remained living with his grandfather.
4. In April 2022, DYC and her family moved into EKC's residence while their house was being demolished and rebuilt.
5. In October 2022, it is asserted that EKC was taken from his home by HBC.
6. In November 2022 the original applicants received a letter from lawyers stating that it was EKC's wish that they vacate his property by 14 December 2022.
7. The material lodged before the Tribunal evidences significant conflict between HBC and the costs respondents. I note that there is a third niece who was not a party to the proceedings and with whom it appears both HBC and EKC have a civil relationship.
8. As stated above, allegations were made by the original applicants that they were concerned for EKC's welfare when in the care of his son. They asserted that EKC had been isolated from other family and friends; was potentially subject to elder abuse and financial exploitation; and that his property may have been sold fraudulently and against his wishes.
9. The costs respondents submitted in their original application that they did not have access to medical records but had organised appointments for EKC with his general practitioner and a geriatrician 'due to EKC's change in mood and forgetfulness'.
10. Summons were issued to three medical practitioners requiring them to produce their records relating to EKC's decision-making capacity. By 31 October 2023 the medical evidence of all three medical practitioners was available to all parties.
11. In their application seeking to withdraw their original applications the costs respondents state that: "While we disagree with the allegations made against us, after reviewing the evidence submitted on behalf of our grandfather we do not wish to litigate this matter further as we acknowledge from the photographs provided in his evidence that our grandfather appears to be happy and safe. We have also received on 29 November 2023 as part of our grandfather's evidence, Power of Attorney and Enduring Guardian documents. The Power of Attorney, namely [HBC], has not kept accounts and money separate from my grandfather, but we can see there has been reasoning for this in the Affidavits provided. We deny the allegations made against us, however acknowledge our grandfather's wishes and do not wish to proceed with our applications. Our grandfather's signed Affidavit is the first contact we have had with our grandfather himself since last year when he began living with [HBC] and respect his wishes.
12. EKC attended the hearing on 4 December 2023 in person with his son and told the Tribunal that he was very happy living with his son and his son's family. The Tribunal consented to the withdrawal of the guardianship and financial management applications which were dismissed.

EKC's submissions regarding costs

1. EKC submits that evidence of medical evidence demonstrating a lack of cognitive capacity was critical to the success of the applications for the making of guardianship and financial management applications lodged by the costs respondents who should have withdrawn their applications once they had access to the medical evidence produced under summonses on 24 October 2023.
2. The legal representative for the costs applicant notes that if factors other than EKC's capacity to make decisions were being pressed, 'it is inexplicable as to why the applications were suddenly withdrawn on the eve of the listed hearing'. It is also noted that the evidence of abuse and exploitation was 'ultimately left untested due to the late and inexplicable withdrawal of the applications'.
3. Counsel for EKC submits that the costs respondents were informed on 16 November 2023 that EKC had extant enduring power of attorney and enduring guardianship appointments made on 14 November 2022 appointing HBC as his enduring guardian and attorney. These appointments were made following an assessment of a geriatrician on 1 November 2022 that he had the requisite capacity to make the appointments.
4. EKC asserts that the costs respondents did not seek to amend their applications in light of this information, 'which unnecessarily compelled EKC to provide further evidence and make preparations at hearing to defend the validity and operation of the appointments'.
5. Notwithstanding the lack of evidence in the medical records, and the information provided about the enduring power of attorney and enduring guardianship appointments, the costs respondents did not withdraw their applications until early December 2023. The applicant asserts that this resulted in EKC incurring significant costs preparing for the hearing on 4 December 2023.
6. EKC also asserts that the costs respondents' late withdrawal and late filing of unsolicited evidence necessitated him appearing with legal representation at the hearing on 4 December 2023.
7. It is asserted that the late withdrawal of the applications placed EKC at an unnecessary disadvantage in accordance with s 60(3)(a) of the NCAT Act, constituting special circumstances warranting an order for costs in his favour on an indemnity basis,

The cost respondents' submissions

1. The costs respondents assert that they commenced the proceedings because they held genuine concern for the wellbeing of EKC. They assert that the commencement of the proceedings 'were not solely reliant on the cognitive capacity' of EKC but included a variety of factors, including a change in their grandfather's behaviour; the behaviour of their uncle towards EKC; their inability to have contact with EKC; and a change in his financial behaviour.
2. The costs respondents deny conducting the proceedings in a way that unnecessarily disadvantaged EKC and deny having unreasonably prolonged the time taken to complete the proceedings.
3. The costs respondents assert that they attempted to contact EKC and his son between November 2022 and February 2023 and commenced the proceedings because they did not receive any response.
4. The costs respondents assert that they were not provided with a copy of the enduring power of attorney or enduring guardianship instrument until 29 November 2023. They do not refute EKC's claim that they were informed about the instruments on 16 November 2023 and did not respond.
5. The costs respondents assert that the costs applicant is 'fixated on the medical evidence as to his ([EKC]'s) cognitive capacity' but that 'this was only one factor which gave rise to the proceedings'. They assert that the 'first direct contact' they had with the costs applicant was receiving his signed affidavit on 29 November 2023, following which they acted promptly and withdrew their applications. They assert that they would have withdrawn earlier if they had received the cost applicants' evidence earlier or it there had been an attempt to resolve the matter informally.
6. The costs respondents also submit that it was unnecessary for EKC to engage a barrister to represent him in the proceedings.

Consideration

1. As stated above, this decision turns on whether the Tribunal is satisfied that there are 'special circumstances' that warrant the award of costs.
2. The meaning of 'special circumstances' was considered in relation to the award of costs in the now repealed Administrative Decisions Tribunal Act 1997 (NSW) by the NSW Court of Appeal in Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81. Santow JA observed that: '[I]t suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional'.
3. This statement has been consistently applied by Appeal Panels of NCAT in determining applications for costs under s 60 of the NCAT Act: see for example Gelder v The Owners - Strata Plan No 38308 [2021] NSWCATAP 109 at [12] and James v Department of Justice (Corrective Services NSW) (No2) [2022] NSWCATAP 216 at [6].
4. In Kaye v The Owners - Strata Plan No 4350 [2022] NSWSC 1386 at [70] Basten AJ said that the term 'special circumstances' in s 60 of the NCAT Act: "[I]s not a term of art. Its scope and operation will depend heavily on the context in which it appears. A particular circumstance which appears to be special in one case may not be so in another. It is not a phrase which readily gives rise to appellate explication."
5. I am not satisfied that the original application lodged by the costs respondent was 'out of the ordinary'. Perhaps somewhat sadly, proceedings such as those brought by the costs respondents are very common before the Tribunal. I accept that the costs respondents may have made the applications out of genuine concern for their grandfather's wellbeing but note that their allegations about EKC being subject to abuse by his son were untested before the Tribunal.
6. What is 'out of the ordinary', however, is for such proceedings to continue to be prosecuted by a party that is legally represented in the face of clear medical evidence that the person who is the subject of a guardianship application does not have cognitive impairment that impacts their ability to make important life decisions, or in relation to financial management, evidence that they are incapable of managing their financial affairs. Such applications cannot succeed.
7. In OLL [2014] NSWCATGD 40, a decision of the Guardianship Division of NCAT in which the applicant was ordered to pay the costs of the other parties, the applicant applied to NCAT seeking review of the operation and effect of an enduring power of attorney made by OLL, alleging that the attorney appointed under that instrument, among other things, had subjected OLL to financial abuse. The Tribunal dismissed that application. At [80], the Tribunal observed that while its jurisdiction is protective, an applicant must nonetheless "bring credible evidence to the Tribunal to support his or her application". The Tribunal stated that it is not sufficient to "raise unsubstantiated allegations and demand that they be answered by the other parties". At [101], the Tribunal found that the proceedings were not "reasonably commenced" because the applicant's claims had no tenable basis in fact or law, were frivolous, vexatious, otherwise misconceived or lacking in substance. The Tribunal concluded at [103] that special circumstances were established.
8. In ZSJ v ZSK [2021] NSWCATAP 144, the appeal panel of the Tribunal determined that the conduct of the appellant in the appeal before she obtained legal representation 'arguably amounted to an abuse of process' and that the decision not to award costs was because the Tribunal took into account the appellant's lack of knowledge and experience about the proper conduct of legal proceedings.
9. The costs respondents in these proceedings were legally represented and cannot assert that they lacked knowledge and experience and may not have understood that their applications could not succeed in the absence of evidence that EKC had a disability that affected his ability to make important life decisions or that he lacked the capacity to manage his affairs.
10. I agree with the costs applicant that the costs respondents' argument that they continued their applications after having access to the medical evidence because they were concerned about issues other than EKC's capacity is flawed. If that was the case, and they were concerned about the ongoing management of EKC's affairs or his living situation, they could have lodged applications seeking review of the enduring power of attorney and enduring guardianship instruments. They did not do so.
11. I am satisfied that the costs respondents were responsible for prolonging unreasonably the time taken to complete the proceedings and that EKC was unnecessarily disadvantaged as a result. They continued to prosecute their applications after it was clear that their claims had no tenable basis in law and lacked substance.
12. I accept the evidence of EKC that his solicitor wrote to the costs respondents' solicitor on 16 November 2023 informing them of the enduring power of attorney and enduring guardianship appointments made by EKC and received no response. In the email to the costs respondents' solicitor, EKC's solicitor asks whether the existence of the instruments will 'affect your ability to proceed at the Hearing on 4 December 2023?' and whether they 'intend to amend their application in the circumstances'. The costs respondents were, in effect, prompted to review the basis of their applications.
13. In ZXJ v ZXK [2022] NSWCATAP 371, the appeal panel of the Tribunal determined that the actions of a party in delaying to the eve of the hearing requesting the Tribunal to initially determine the question of the appellant's capacity to manage her financial affairs, amounted to special circumstances warranting an award of costs. In reaching that conclusion the Tribunal placed significance on the costs respondent being put on notice by the Tribunal that the real issue in the proceedings was the appellant's capacity to manage her financial affairs. In the intervening period the costs respondent filed significant amounts of material largely irrelevant to that question. The Tribunal concluded that it was not unreasonable for the appellant to prepare her case on the basis that she would be required to address those issues or at least those relevant to the applications before the Tribunal.
14. There are parallels in this matter. The costs respondents were put on notice by the Tribunal during a directions hearing that they needed to provide medical evidence to support their assertions that EKC lacked capacity, following which they applied for summonses to be issued to his medical practitioners. Despite access to medical evidence refuting that EKC lacked capacity, the costs respondents continued to lodge material before the Tribunal.
15. The costs respondents were put on notice again on 16 November 2023 by the solicitor for EKC that EKC had executed enduring power of attorney and enduring guardianship instruments.
16. I find that because of the failure of the costs respondents to respond to the communication on 16 November 2023, EKC's legal representative began to prepare for the hearing on 4 December 2023, including 'assisting in the preparation of extensive affidavit evidence to refute the various unsubstantiated claims made by the (costs respondents) in their evidence'.
17. It is unclear on the material before me whether all the medical evidence was available to the costs respondents on 23 October 2023 or 30 October 2023. If it was the latter, by 16 November 2023 the costs respondents had been able to access the medical evidence for over two weeks. If it was the former, they had access for over three weeks.
18. I am satisfied that two weeks was adequate time for the costs respondents to review the medical evidence. Their failure to seek to withdraw their applications after being aware that there was no evidence that EKC lacked capacity resulted in EKC incurring unnecessary legal costs.
19. I order that the costs incurred by EKC after 16 November 2023 are to be paid to him by the costs respondents as agreed or, failing agreement, as assessed. I am not satisfied that the circumstances warrant the award of costs on an indemnity basis.
20. I considered whether to exclude the costs of counsel but determined that they should be included. EKC is an elderly man who did not initiate the proceedings and was entitled to engage the legal representatives of his choice to represent him.

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: 08 July 2024