Da Rin v Duffy

NCAT Occupational|2014-06-10

reasons for decision 1In response to an application brought by John Da Rin under s 329 of the Local Government Act 1993 (LGA), the Administrative Decisions Tribunal (the ADT) ordered that Kevin Michael Duffy, a councillor of the Orange City Council, be dismissed from office, Da Rin v Duffy [2013] NSWADT 284 (9 December 2013). 2The applicant applied for the costs of the application. This decision deals with that application, and is made by the successor tribunal to the ADT in accordance with the transitional provisions: see Civil and Administrative Tribunal Act 2013, Schedule 1. 3Following directions, the parties have filed the following: applicant's costs submissions, 23 December 2013, including a chronology, together with affidavit of John Da Rin, sworn 20 December 2013 giving an account of expenses and costs incurred; an affidavit of Daryl Lindsay Johnston, professional agent, sworn 23 December 2013 in support of the applicant's submission for costs; respondent's submissions, filed 15 January 2014; applicant's submissions in reply, and respondent's supplementary submissions, both filed 24 March 2014.

Applicable Provisions 4The costs application is governed by the provisions in force at the time of the principal application. The LGA at that time at s 329(6) that (6) The Tribunal may award costs under section 88 of the Administrative Decisions Tribunal Act 1997 in respect of proceedings commenced by an application made under this Part. 5Section 88 of the Administrative Decisions Tribunal Act 1997 (ADT Act) provided relevantly: 88 Costs (1) Each party to proceedings before the Tribunal is to bear the party's own costs in the proceedings, except as provided by this section. (1A) Subject to the rules of the Tribunal and any other Act or law, the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that it is fair to do so having regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings by conduct such as: (i) failing to comply with an order or direction of the Tribunal without reasonable excuse, or (ii) failing to comply with this Act, the regulations, the rules of the Tribunal or any relevant provision of the enactment under which the Tribunal has jurisdiction in relation to the proceedings, or (iii) asking for an adjournment as a result of a failure referred to in subparagraph (i) or (ii), or (iv) causing an adjournment, or (v) attempting to deceive another party or the Tribunal, or (vi) vexatiously conducting 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) any other matter that the Tribunal considers relevant. (2) The Tribunal may: (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on a basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis. (3) However, the Tribunal may not award costs in relation to proceedings for an original decision unless the enactment under which the Tribunal has jurisdiction to make the decision provides for the awarding of costs. (4) In this section, costs includes: (a) costs of or incidental to proceedings in the Tribunal, and (b) the costs of or incidental to the proceedings giving rise to the application, as well as the costs of or incidental to the application. 6These were proceedings for an original decision. Sub-section (4) is satisfied by virtue of s 329(6) of the LGA, and therefore s 88 applies to this case. (While decisions in relation to costs may be made by a single judicial member of the Tribunal (ADT Act s 24A(2)(b)), on this occasion all three members of the panel have joined in the decision.) 7In its original form s 88 provided, relevantly (the old exception): (1) Subject to the rules of the Tribunal and any other Act or law, the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that there are special circumstances warranting an award of costs. 8The Tribunal did award a successful applicant for dismissal costs under the old exception in the important case of Borsak v Cheung (No 2) [2006] NSWADT 208. It made an award of costs under the old exception against an unsuccessful applicant in La France v Clarence [2004] NSWADT 256; and also in Tuffy v Vaughan & ors. (No 2) [2009] NSWADT 242 and Tuffy v Vaughan (No. 2) (Costs) (GD) [2010] NSWADTAP 25. 9Arguably, the old exception to the rule that each party bear their own costs - 'special circumstances' - is not as relaxed as the new exception, applicable to this case - 'only if ... fair to do so' (the new sub-section (1A) - which commenced on 1 January 2009). As to the interpretation of the new exception, both parties drew attention to Basten JA's comments in AT v Commissioner of Police [2010] NSWCA 131 at [33], which I will not set out here. They say different parts of those comments as supporting their respective arguments.

Professional Costs of Non-Lawyer 10The applicant's case was prepared and presented by a non-lawyer agent, Mr Daryl Lindsay Johnston, through the preparatory stages (directions hearings, preparation of evidence and submissions, and for day one of the hearing at Orange). Mr Johnson, in the affidavit noted above, filed as part of the applicant's submissions (which as noted by the respondent was not contemplated by the directions) stated that he is a director of Agtion Consultancy Services Pty Ltd. He said that the company specialises in providing a professional consultancy and forensic analysis service to lawyers and litigants mainly involved in agribusiness cases. He said that he is not legally qualified but does however have extensive experience in litigation matters through his qualification as a food scientist doing forensic analysis work. He stated that on 14 February 2013 he was appointed public officer of the Orange Ratepayers Association, and held that office until he resigned on 26 June 2013. 11Consequently, the application for costs extends beyond the professional costs of legal representation (the usual limit of a costs order in the ordinary courts: see Cachia v Hanes (1994) 179 CLR 403) and includes an application for Mr Johnston's fees). 12There is no bar to a professional non-lawyer agent appearing in the Tribunal: see further, Law Society of New South Wales v Spring [2007] NSWSC 1273 (Barr J). After a careful examination of the authorities, the Appeal Panel ruled in B & L Linings Pty Ltd & anor v Chief Commissioner of State Revenue (No 4) (RD) [2008] NSWADTAP 14 at [86]: 'costs awarded under section 88(1) of the ADT Act [see now s 88(1A)] may include the costs incurred by a successful party in engaging an agent, who is not an Australian legal practitioner, to represent him or her'. We agree with the Appeal Panel. 13A barrister, Mr Duncan Brakell, appeared for the applicant at days two and three of the hearing. The costs submissions have been prepared by a solicitor, Mr Thomas Bray, who also instructed on days two and three.

Orders Sought 14The applicant's primary application is for his costs of and incidental to the proceedings giving rise to the application, as well as costs of and incidental to the application, on an indemnity basis from 12 March 2013. The application was filed in the Tribunal on 7 December 2012. The first day of hearing was 7 May 2013. The date, 12 March 2013, is the date of a notice given by the applicant's non-lawyer agent, Mr Johnston, that if his case failed to discharge the required onus falling on the councillor the subject of an application there would be a costs application. The applicant's estimate of costs incurred is $66,325.67. 15If the Tribunal is not minded to award costs on an indemnity basis the applicant applies for an order that the respondent pays the applicant's costs of and incidental to the proceedings giving rise to the application, as well as the costs of or incidental to the application. They were stated to be (as at 20 December 2013): Disbursements in the amount of $634 Agent's fees in the amount of $37,999.98 Solicitor and barrister fees in the amount $27,916.69. 16We note that, on my calculation, the total of these amounts exceeds by a little over $200 the amount claimed as costs on an indemnity basis. 17The respondent's application is that there be no order for costs. Alternatively, the respondent applies for his costs up to, but not including, the second day of hearing on the ground that the applicant conducted his case in a time-consuming and unnecessarily litigious manner, and thereby caused numerous delays, multiple mentions and multiple relistings. 18On the other hand if the Tribunal is minded to accede to the applicant's application, the respondent's submission is that it should only do so in relation to the costs incurred from day two onwards. The respondent also questions the details of many of the charges itemised in the material filed by the applicant, contending that they include unreasonable charges and duplication. If there is to be an order it should be one in terms of sub-section (2)(b) which would require it to go to the costs assessment process. The respondent also challenged the level of fees sought on behalf of Mr Johnston, and queried whether some of the work was more properly attributable to his position as a public officer of the Orange Ratepayers Association.

Applicant's Submissions 19The applicant's submissions note that he acted in bringing these proceedings as a public-spirited citizen concerned to see that the propriety and integrity of the electoral system for local government was maintained. The Tribunal found that Mr Duffy was not a resident of the municipality at the time of his nomination and therefore wrongly stood for election and was irregularly elected. The applicant referred to his role as secretary of the community-based Orange Ratepayers Association, and its objectives which included concern for integrity in the electoral process. 20The applicant's submissions referred to the strength of the Tribunal's final conclusion at [41]-[42] of its reasons: 41 While the case has occupied three hearing days, two for evidence, one for submissions, in our opinion the answer is clear-cut. 42 We are not satisfied that the address given by the respondent in his nomination recorded a place of residence, in the way that term is interpreted and applied in electoral law, either at the date it was given, the date of nomination or on the date the rolls closed. Accordingly the respondent's election was affected by an irregularity. It was a significant one, and he must be dismissed from civic office. 21The applicant submits that the respondent's case was a relatively weak one, and it had no tenable basis in fact and law (factor (c), s 88(1A)). The applicant submits that had the respondent recognised at an early stage the weakness of his case and conceded the irregularity and resigned, the applicant would not have been put to the cost and expense of, what proved to be, protracted proceedings. In this regard the applicant pressed the analogy with the case of Borsak v Cheung [2006] NSWADT 5. 22The submissions also refer to steps taken by Mr Johnston in February and March 2013 to obtain by co-operation documents from Mr Duffy which might have quickly resolved the issue of whether Mr Duffy was a resident at the address at the time of his nomination. The submissions, and Mr Johnston's affidavit, refer to what is seen as the inadequacy of the respondent's response to particulars contained in the amended application. The Tribunal had directed that the respondent reply to the particulars. The applicant submits that he was forced by the inadequacy of the respondent's replies to press on with the application and to prepare and have issued extensive document summonses. 23The applicant submits that it was incumbent on the respondent in proceedings of this kind to produce to the Tribunal the information necessary to prove his place of living, rather than force the applicant, as transpired, to obtain the necessary information from external parties and sources at cost to him in time, effort and money. 24The applicant also referred to the Tribunal's observation at [29] that Mr Duffy made 'no more than a strategic decision to take up a room at Orange to obtain an address that could be given in the nomination form'.

Respondent's Submissions 25The respondent emphasised that the primary rule in proceedings in the Tribunal is that each party bear their own costs, and that it not lightly be departed from. The respondent disputes that he was recalcitrant in any way in dealing with the directions given by the Tribunal in February 2013. 26The respondent referred to the history of the proceedings in January and February 2013, and the motions brought by Mr Johnston to have the Orange Ratepayers Association substituted for Mr Da Rin as the applicant, and the Tribunal's decision not to permit that. These were presented as an example among a catalogue of other instances in later stages of the pre-hearing process where it was said that Mr Johnston had behaved in a way that contributed to the dragging out of the proceedings. The respondent questioned the way in which Mr Johnston conducted the case in issuing very sweeping document summonses and in obtaining statements from witnesses whose evidence belonged to a period much later than the critical period of April to July 2012. Some of them were called on day one, and their evidence proved to be of no value, it was said. 27The respondent disputed strongly the assertion in the applicant's submissions that the respondent had sought to pass off an electricity account in a very low amount for the Borenore Railway Station as an electricity account for the family farm at Borenore. (The question of the degree of use by the respondent of the Borenore farm figured strongly in the proceedings, as it was contended that that remained his place of living during the time he also had available to him his son's house in Orange.) 28The respondent denies that he was unco-operative in responding to the document summons once it was issued (10 April 2013). The respondent submits that it is inappropriate to raise new issues of non-compliance or inadequate compliance with summonses when, in its submission, they were not raised formally before the Tribunal, and the Tribunal invited to rule on them.

Consideration 29The general rule is that each party bears their own costs. On the other hand, applications for dismissal from civic office go to a fundamental aspect of the system of democratic government in our community - the integrity of the election process. It is in the public interest that applicants not be deterred from bringing good cases by the fear of the legal costs that will be involved. 30Equally, invoking the s 329 jurisdiction ought not to be the first step taken by a citizen who is apprehensive about the regularity of an elected councillor's nomination. Councillors should be prepared to reply in an open and transparent way to any query a citizen has about the basis for their claim of residence. This is consistent with the observation the Tribunal made in in Borsak v Cheung [2006] NSWADT 5 at [74] about the way the case is to be conducted in the Tribunal itself: Nature of the Inquiry 74 We do not see a case such as this as one where the applicant bears any onus. 'Any person' is entitled under the LGA to challenge the credentials of a councillor. The councillor is then required, as we see it, to satisfy the Tribunal, on balance, that she or he has a place of living or residence within the area. (The councillor could move at an early stage for summary dismissal if the applicant produces no arguable evidence in support of an application, and the councillor has clear evidence to the contrary. ...) 31In this case, we agree with the applicant's submissions that Mr Johnston did try to promote an interchange of this kind when he first became involved in the case in February 2012, even though that was at a point of time after the proceedings had been commenced. When that attempt did not lead to a resolution, Mr Johnston chose, in our view uncritically, to follow the approach taken in the leading case of recent years, Borsak v Cheung. 32He issued sweeping summonses for records relating to Mr Duffy's use and occupation of the two places of residence under notice, the room at his son's house and the family farm at Borenore (which lay outside the Orange municipal district). He sought access to financial records, payment records, taxation records as part of this quest. He sought mobile phone records (these records were significant in Borsak v Cheung) with a view to ascertaining how frequently calls were made from within the Orange municipal district. In our view this was an overzealous approach to the task at hand, and involved a significant misjudgement on Mr Johnston's part which contributed to the proceedings being far more elaborate than they need have been. At directions hearings, the question of the period relevant to the question at hand was canvassed. It was indicated that while some evidence of circumstances prior and after the key period might have some value, the evidence should focus on the period April to August 2012. Nonetheless, despite that indication, Mr Johnston filed and served affidavit evidence from local residents recounting observations of the activity of Mr Duffy that lay well beyond that period. This created work for the respondent which ought to have been avoided. This 'surveillance' evidence, together with the evidence about the making of mobile phone calls and their possible location, occupied most of day one of the hearing and was time wasted, in our opinion. 33As is implied by the respondent's solicitor's submissions, an implication that we accept, there was a much greater degree of order and focus brought to the case on its second and third days of hearing when Mr Brakell of counsel and Mr Bray, solicitor, had become involved. The presence of lawyers for the applicant also contributed to a more detached atmosphere in the way the case ran. Mr Johnston's direct involvement in the Ratepayer's Association cast him as a partisan and did itself contribute to a level of tension, and difficulty, in disposing of the case. 34We do not see it as productive, as sought by the applicant's costs submissions, to be drawn into an inquiry, and the making of findings, on the propriety or otherwise of Mr Duffy's production of an electricity account for the railway station rather than the family farm. 35We accept on the other hand that a more informative response from Mr Duffy at the beginning of this case would have contributed to a quicker and earlier resolution. Mr Duffy was an experienced councillor. He had been a member of the Cabonne Council, the neighbouring municipality, for many years including a period as mayor. He was a serving member of the Cabonne Council at the time he nominated for Orange. Naturally these circumstances were likely to give rise to speculation as to where he lived and whether he had he moved to Orange. He should have been more conscientious in regard to ensuring the residence obligation was met. 36The case of Borsak v Cheung did illustrate the risk involved in giving as a place of residence in the nomination form a place recently occupied that was of a very rudimentary kind, and made available by a friend or supporter. That case like the present involved the circumstance that the nominee continued to frequent the family home located outside the electoral district, and did so on a welcoming basis. As we see it, it was in Mr Duffy's interests to be either minimally reponsive or non-responsive in relation to the searches and inquiries being undertaken by Mr Johnston. We do not, as his submissions sought to do, lay all the blame at the feet of Mr Johnston for the proceedings being drawn out and excessive. 37But we do accept that at hearing, in this case, in contrast to Ms Cheung's defence in Borsak v Cheung, Mr Duffy's principal witnesses, his son and his wife, were to the point and gave relevant evidence that the Tribunal regarded as candid and honest. Mr Duffy, on the hand, often dealt with questions in a vague and circumlocutious way. 38We consider it fair, by way of exception to the usual rule, to make a costs order in favour of the applicant. 39The costs should be assessed in the usual way on a party-party basis cognisant of the observations we have made about the way the case was run on both sides. The applicant's application for costs to be assessed on an indemnity basis is rejected. In Re Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd & ors [1988] FCA 202 Woodward J at [21] said: 'I believe that it is appropriate to consider awarding 'solicitor and client' or 'indemnity' costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion.' 40See further the comprehensive guidelines given in Colgate-Palmolive Company and Colgate-Palmolive Pty Limited v Cussons Pty Limited & ors [1993] FCA 536; (1993) 46 FCR 225 at [21] per Sheppard J. 41We acknowledge that this is a species of public interest litigation and the claim to be reimbursed on an indemnity basis is higher, we consider, than is the same claim in private litigation. Nonetheless the making of an indemnity costs order is not to be done lightly. Here, to paraphrase Woodward J's words, the question is whether the respondent, properly advised, should have admitted the irregularity, on the basis that he had no chance of success. Did he continue to defend the proceedings for an ulterior motive, did he show a wilful disregard of the known facts? While we think this was a borderline case, we are not disposed to go so far as to find that he defended the matter without any chance of success. 42As to the detail of our order, we have decided with reluctance to make the order in a form that provides for the possibility of assessment. In our view it is preferable to make final costs orders in fixed amounts, so that the costs assessment process does not become a new theatre of conflict between the parties and itself thereby generates further costs to be borne by the party against whom an order is to be made. Nonetheless we cannot see any practical alternative in this case. 43Further to what we said earlier, there was an amount of documentation generated in the case that went well beyond what was required for an economical and efficient disposal of the case. This is mainly attributable to the summonses issued by Mr Johnston. We have in mind in particular the documentation that went to the personal taxation history, the history of his occupation and use of the family farm at Borenore, and the inconclusive and sweeping nature of the inquiries about telephone phone use. As also noted earlier, large volumes of evidence were introduced into the case by Mr Johnston (the surveillance evidence, the telephone evidence) upon which, ultimately, no reliance was placed. (This pattern was repeated in the lodgement of the voluminous affidavit relating to costs in respect of this application.) The case should it seems to us have sharply focussed on the period March/April to July/August of 2012, with only limited attention to events prior to and subsequent to that time. These observations should be taken into account in the costs assessment process. 44It will also be necessary to reach a conclusion in that process as to the appropriate fee attributable to Mr Johnston's services. In that regard we would not go so far as to adopt the submission of the respondent's solicitor that his work was merely that of a paralegal. He clearly drove and constructed the case, and was not a mere factotum, but in our view a relatively modest allowance should be made for his professional costs, having regard to what we have already said, and similarly care should be brought to the assessment of the costs of the legal representatives.

Order 45That the respondent pay the applicant's costs from 12 March 2013 as agreed or 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: 10 June 2014

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