Deputy Secretary, Local Government Planning and Policy v Cornish

NCAT Occupational|2021-02-15

REASONS FOR DECISION

Councillor Marcus Cornish has applied for an order for costs of proceedings brought in the Tribunal in 2017 by the then Chief Executive, Office of Local Government under the Local Government Act 1993 (NSW) (LG Act): Chief Executive, Office of Local Government v Cornish [2018] NSWCATOD 110 (the Tribunal proceedings).
The proceedings related to the conduct of Clr Cornish at meetings of Penrith City Council in 2014. Following an investigation by a conduct reviewer, the Council resolved on 27 July 2015 to require Clr Cornish to publicly acknowledge breaches of the Council's Code of Conduct; to give an undertaking that he would avoid similar breaches in future; to offer an unqualified apology to the Mayor, Council and the Penrith Community; to give an undertaking that he would not make negative or derogatory comments regarding the complaint; and to give an undertaking to participate in a course of training offered by the Council relating to its Code of Conduct and attend that training (Resolution CW11).
Clr Cornish did not comply with those resolutions. The Chief Executive, Office of Local Government, pursuant to s 440J(2)(b) of the LG Act, referred the matter to the Tribunal, seeking an order pursuant to s 482A(2) of the LG Act that Clr Cornish be suspended from civic office, or in the alternative that his right to payment be suspended, or in the further alternative that he be reprimanded.
On 12 July 2018 the Tribunal determined that the failure of Clr Cornish to comply with the Council resolutions was a breach of cl 8.10 of the Council's Code of Conduct, and constituted misconduct. The Tribunal considered whether a reprimand or suspension would be appropriate disciplinary sanctions, and concluded: … 141. In these circumstances, the appropriate order is that the respondent's right to payment be suspended for a period of three months from the date of these reasons. Costs 142. I reserve the question of costs. 143. If either party seeks costs, they should file and serve written submissions within two weeks of receiving these reasons, with the other party responding if it wishes to within a further two weeks. Any submissions should address s 60 of the NCAT Act. 144. My preliminary view is that the question of costs should be determined "on the papers", and without a further hearing. However, if either party considers it appropriate for a hearing to be held on the issue of costs, their submissions should address that issue.

Issues

The issues for determination are: 1. Whether the Tribunal has power to make an order for costs of the Tribunal proceedings in matter 2017/212948; 2. Whether Clr Cornish requires an extension of time to make an application for costs of the Tribunal proceedings; 3. If so, whether an extension should be granted; 4. Whether there are special circumstances warranting an order for costs; and 5. If so, whether an order for costs should be made.
It was common ground between the parties that the Tribunal has power under s 60 of the NCAT Act to make an order for costs of the Tribunal proceedings. As discussed in the reasons which follow, the Tribunal has some reservations as to whether that position is correct in the particular circumstances of this matter. However, reflecting the agreed position of the parties, the Tribunal has proceeded on the basis that there is such a power. The Tribunal has concluded that an extension of time would be required to make the application; and that even if such an extension were granted, there are not special circumstances warranting an order for costs. Accordingly, the application must be dismissed.

Clr Cornish's submissions

In the application for costs Clr Cornish stated as special circumstances warranting an order for costs that the decision of the Tribunal was set aside, and Clr Cornish was entirely successful or at least substantively successful; that the Tribunal erred in not conducting an inquiry as to the justification for the recommendations; that the Chief Executive erred in failing to conduct its own investigation and in referring the matter to the Tribunal; that the Tribunal had not yet dealt with the costs of the proceedings; that there is a disparity of legal power and influence; and that there are special circumstances as stated in s 60(3)(c), (d), (e) and (g) of the NCAT Act.
In written submissions Clr Cornish submitted that the Supreme Court set aside the totality of all the Tribunal decision below, including its costs determinations which included the directions in paras [142]-[144], on the basis that the Tribunal decision was void. That means that the application for costs is not out of time, and leave would not be required.
Clr Cornish relied on the Court of Appeal decision in Wilson v Chan & Naylor Parramatta Pty Ltd [2020] NSWCA 213 ("Wilson") as authority for the proposition that the Tribunal has power pursuant to s 60(2) of the NCAT Act to make any costs order "incidental to the jurisdictional issue". As was the case in Wilson, here costs have been incurred by Clr Cornish for the duration of the hearing before the Tribunal. Clr Cornish submitted his position is stronger than was the case in Wilson, as he has enjoyed complete success and as the completely successful party he is entitled to his costs.
Clr Cornish submitted that there is no delay in the application for costs. The period from 12 July 2018 to 3 September 2019 was consumed by the jurisdictional review in the Supreme Court. The period 4 September 2019 to 3 June 2020 was consumed by the attempted application of Penrith City Council Policy LG-006, so as to ensure that all identifiable administrative remedies had been exhausted before attempting an application for costs in the Tribunal. From 4 June 2020 there was the taking of advice and preparation for the next step in recovery of costs in the Tribunal. Clr Cornish submitted that there is no prejudice to the other party, and Clr Cornish has acted under the complex administrative and appeal circumstances with all due haste and speed for the just and quick resolution of costs incurred before the Tribunal.
In his Reply submissions Clr Cornish acknowledged that Penrith City Council was not a party to the Tribunal proceedings, or the Supreme Court proceedings. He had sought administrative costs recovery from the Council pursuant to the comment made by Basten J at [92] of his Honour's reasons that once the Tribunal order was set aside, "the councillor may have some entitlement to recoupment of those payments from the Council". That was found in the Council recoupment policy LG-006.
Clr Cornish submitted that if hypothetically the Chief Executive had sought and been awarded costs of the Tribunal proceedings, the Supreme Court would have set aside that costs order. The application brought in the Tribunal was flawed ab initio, because it was inappropriate to make an application under s 469 of the LG Act without fresh investigation by the Chief Executive, and inappropriate to lodge the application in the knowledge that Resolution CW11 could not on reasonable examination amount to a lawful basis on which to make a disciplinary order of the kind sought by the Chief Executive. The approach adopted by the Tribunal to the powers on referral was criticised by the Supreme Court, and the denial of a merits review is also a special circumstance.
In oral submissions counsel for Clr Cornish submitted that the Tribunal decision was reversed by the Supreme Court, and so para [142] of that decision can be ignored because of the changed circumstances, or because it was overturned. Accordingly, the general discretion as to costs applies. Any delay in making the application for costs should be counted from the order of the Supreme Court in 2019, and that is not a long period.
Counsel for Clr Cornish relied on s 60(3)(c) of the NCAT Act, submitting that there was never a case to argue and the matter should not have been brought to the Tribunal. While accepting it was not put front and centre, the jurisdictional issue was raised in the Tribunal. On s 60(3)(d), it is accepted that it was a complex case. For s 60(3)(e), the proceeding was misconceived in the sense that there was no jurisdiction, however it was not submitted that it was frivolous or vexatious.
Clr Cornish submitted that he had been put to a lot of time and expense for a matter that was ultimately without merit, and he would be prejudiced if not granted costs.

Chief Executive's submissions

In written submissions responding to Clr Cornish's written submissions, the Chief Executive relied on the decision of Harrison AsJ in Kelly v Szatow [2020] NSWSC 407 in support of the contention that the order set aside by Basten J was the singular order made by the Tribunal that Clr Cornish's right to payment be suspended, and submitted that his Honour made no order as to the costs of the proceedings before the Tribunal. As a consequence the judicial review proceedings do not interfere with the Tribunal's jurisdiction to award costs, and paras [142]-[143] of the Tribunal decision continue to have effect. Neither party filed submissions on the question of costs within two weeks of receiving the Tribunal decision, and accordingly Clr Cornish requires an extension of time.
The Chief Executive submitted that an extension of time should not be granted. First, there was a delay of over two years. Clr Cornish could have raised the question of costs in the Supreme Court proceedings, or filed an application for costs in the Tribunal within two weeks of the Supreme Court decision being delivered.
Secondly, the delay is not adequately explained, or supported by evidence. There is no explanation as to why it took seven months from the Supreme Court decision until April 2020 to settle the bill of costs for the Tribunal proceedings, and the bill of costs is not in evidence. There is no explanation for why Clr Cornish considered it appropriate to approach Council for the costs to be paid having regard to the fact that the Council was not involved in the Tribunal proceedings. There is no explanation for why it took a further three and a half months after Council advised it would not pay those costs. Those delays were all entirely within the control of Clr Cornish.
Thirdly, the lengthy delay will cause prejudice to the respondent in two forms: first, the respondent has had the benefit of the Tribunal decision for over two years and is being deprived of the ability to draw a line under the proceedings which have been finally determined for over a year; and secondly, if the Tribunal awards costs there will be a further costs assessment process in addition to the costs assessment that took place in relation to the Supreme Court proceedings. Had Clr Cornish brought his costs application in a timely manner it would have been simple for both sets of costs to be determined by the same assessor concurrently, a saving of time and money on the assessment process.
Fourthly, the merits do not justify an extension of time being granted, as special circumstances do not exist.
The Chief Executive submitted that there is no basis for Clr Cornish to receive costs of the internal appeal, and the costs of the Supreme Court proceedings are being determined separately pursuant to the Supreme Court processes. There are no special circumstances warranting a costs order in the Tribunal proceedings, for the following reasons.
First, the submission that the fact that the Tribunal decision was ultimately found to be legally incorrect is itself a special circumstance should not be accepted: that amounts to nothing more than a submission that because Clr Cornish was successful on judicial review he ought to have his costs of the Tribunal proceedings. In any event the fact that the Supreme Court set aside the Tribunal decision has nothing to do with the Chief Executive's conduct of the proceedings before the Tribunal and cannot justify an award of costs.
Secondly, the submission that the Supreme Court conclusion that the Council resolution lacked authority and therefore neither the Chief Executive nor the Tribunal had the power to discipline Clr Cornish for contravention of that resolution is nothing more than a submission that Clr Cornish's success in the judicial review proceedings justifies an award of costs under s 60. There is no suggestion in the Supreme Court decision that the Chief Executive acted inappropriately in bringing the application before the Tribunal or otherwise acted in a way that would justify an award of costs under s 60.
Thirdly, Clr Cornish's submission to the Tribunal based on the Chief Executive's reliance on the conduct reviewer's report was rejected by the Tribunal, and the Tribunal findings on the departmental report were not the subject of the Supreme Court application; and that cannot form the basis of special circumstances.
Fourthly, the arguments advanced by the Chief Executive before the Tribunal and the Supreme Court were arguable, and the Supreme Court did not suggest otherwise in its decision. The submission that the application to the Tribunal was misconceived and lacking in substance should be rejected.
In oral submissions the Chief Executive submitted that had Clr Cornish lodged his application for costs within two weeks after the delivery of the Supreme Court decision it would not oppose an extension of time; however there is no basis to extend the time provided by the Tribunal at [142] of its reasons. An extension of time is required and there is no basis on which it should be granted.
As to the application of s 60 of the NCAT Act, the Chief Executive submitted that the fact that Clr Cornish was ultimately successful is not special circumstances. Even though the ultimate finding was that there was no jurisdiction, it does not follow that the application should not have been brought. The application was not unmeritorious. Section 60(3)(c) is not met simply because the Supreme Court ultimately held there was no jurisdiction; it was a marginal point at first instance.

The Tribunal's power to award costs

There is no specific provision in the LG Act relating to costs of disciplinary proceedings in the Tribunal under Part 3 of Chapter 14 of the LG Act, or in the provisions of Div 2 of Part 4, Sch 5 of the NCAT Act relevant to proceedings in the Occupational Division relating to local government councillors.
The general rule is stated in s 60(1) of the NCAT Act, that each party is to pay its own costs. Section 60(2) provides that the Tribunal may award costs in relation to proceedings before it "only if it is satisfied that there are special circumstances warranting an order for costs". Section 60(3) provides: (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.
An application for costs is an "ancillary decision" as defined in s 4(1) of the NCAT Act, being consequential on a decision determining proceedings. The written submissions filed in support of the costs application refer to "Two sets of costs determinations to be considered", and Clr Cornish's solicitor confirmed during the hearing of the costs application that he is seeking costs of the internal appeal. However, as indicated during that hearing, any application for costs of the internal appeal needs to be made to the Appeal Panel. The orders of the Supreme Court included an order that the Chief Executive pay Clr Cornish's costs of the proceedings in that Court. The subject of the present application is costs of the Tribunal proceedings 2017/212948, determined on 12 July 2018.

The Supreme Court Orders

The first question for consideration is to identify what effect the orders of the Supreme Court had on the Tribunal orders made on 12 July 2018, and in particular whether the directions made in paras [142]-[144] of the Tribunal decision for any costs application were unaffected.
As noted at [5] above, the Tribunal made one order, that Clr Cornish's right to payment was suspended for a period of three months from the date of the Tribunal reasons. Order 1 of the Supreme Court orders made on 3 September 2019 was to set aside "the order of the Civil and Administrative Tribunal made on 12 July 2018"; and by Order 2, the proceedings commenced in the Tribunal were dismissed.
Clr Cornish submitted that the orders of Basten J in the Supreme Court set aside the totality of the Tribunal's decision, including the directions in [142] - [144], because the Tribunal decision was void. In oral submissions, Clr Cornish maintained the position that the whole of the Tribunal decision was reversed by the Supreme Court. He submitted that the direction in [142] can be ignored because it was a direction and not an order of the Tribunal, and the circumstances have changed, or in the alternative it was overturned by the Supreme Court, leaving the general discretion to make a costs order.
The Chief Executive contended that only the order to suspend Clr Cornish's pay was set aside, and there was nothing to interfere with the directions as to any costs application. In support of that position the Chief Executive relied on the decision of Harrison AsJ in Kelly v Szatow [2020] NSWSC 407.
In Kelly v Szatow [2020] NSWSC 407 Harrison AsJ determined applications for leave to appeal and appeals from five determinations made by the Tribunal in proceedings under the LG Act. The plaintiff and all defendants were Councillors on Ku-ring-gai Council. The applications in the Tribunal concerned code of conduct complaints made by Mr Kelly against each of the respondents; and an allegation that false information in a candidate information sheet completed by one of the respondents, Mr Smith, caused an irregularity in the manner in which he had been elected. Those proceedings were dismissed, and the plaintiff ordered to pay the costs of the proceedings. The plaintiff's internal appeal against the costs decision in the code of conduct complaints was dismissed, with costs.
In the applications relating to the code of conduct complaint the plaintiff had conceded at the Tribunal hearing that the matter was not within the Tribunal's jurisdiction, and the proceedings were dismissed for want of jurisdiction. In ordering costs, the Tribunal found that the plaintiff had continued with the proceedings notwithstanding being on notice of the respondents' arguments in relation to jurisdiction in their submissions; and that the decision to continue proceedings amounted to an abuse of process. On appeal, the Appeal Panel of the Tribunal concluded that the Tribunal had correctly applied relevant legal principles and the discretion to award costs did not miscarry.
In the application relating to the candidate information sheet, the Tribunal found that there was no evidence to support the proposition that the information in the candidate information sheet was incorrect, and that even if the information was found to be incorrect there was no evidence that the irregularity would have resulted in a different outcome of the election. Costs were ordered against the plaintiff.
One of the issues in the proceedings before Harrison AsJ was the question of whether the Tribunal erred in making an order as to costs in circumstances where it lacked authority to hear the matter. The plaintiff had relied on Burns v Corbett; Gaynor v Burns (2017) 96 NSWLR 247; [2017] NSWCA 3, and Cornish v Secretary, Department of Planning, Industry and Environment [2019] NSWSC 1134, in submitting that there is no power to make a costs order in the absence of jurisdiction in a particular matter. Her Honour rejected that submission, stating in relation to Cornish: 154. For reasons which are not relevant to these proceedings, Basten JA in Cornish determined that there had been no basis on which to refer the disciplinary proceeding to NCAT. As such, Mr Cornish was entitled to have the Tribunal's decision to suspend his pay set aside, and the primary application dismissed ([93]). 155. Having made his determination that the Tribunal lacked jurisdiction, Basten JA made the following orders at [94]: "(1) Set aside the order of the Civil and Administrative Tribunal made on 12 July 2018. (2) In lieu thereof, order that the proceedings commenced by the predecessor to the Secretary in the Tribunal be dismissed. (3) Order that the Secretary pay Mr Cornish's costs in this Court." 156. I agree with the defendants' submission that "the order" to which Basten JA refers in order (1) above is the Tribunal's singular order of 12 July 2018 that Mr Cornish's right to payment be suspended for a period of three months. As such, Basten JA makes no orders as to the costs of the proceedings before the Tribunal. Moreover, it does not follow from the reasons in Cornish that where the Tribunal lacks jurisdiction, it lacks jurisdiction to award costs.
Harrison AsJ rejected the argument that where the Tribunal lacks jurisdiction to hear a case, it lacks jurisdiction to make an order as to costs, and refused leave to appeal from the costs orders made by the Tribunal: [2020] NSWSC 407 at [157].
The Tribunal agrees with the submission of the Chief Executive that it was the singular order of the Tribunal to suspend Clr Cornish's right to payment that was set aside by the Supreme Court. That is clear from the language used, referring to "the order", and is supported by Harrison AsJ in Kelly v Szatow. While technically obiter dicta, her Honour's statement at [156] to that effect was made in a context relevant to the issues both in that matter and in the present application, namely whether the Tribunal retained the power to make an order for costs in the absence of jurisdiction to determine the substantive matter.

Costs of proceedings in which the Tribunal lacks jurisdiction

At the hearing of this costs application, it was common ground between the parties that the Tribunal has power under s 60 of the NCAT Act to make an order for costs of proceedings in respect of which it lacks jurisdiction: the Chief Executive relying on the comments of Harrison AsJ in Kelly v Szatow at [156], and Clr Cornish relying on the decision of the Court of Appeal in Wilson.
Wilson was an appeal from the Tribunal, where the jurisdictional issue was the constitutional limitation on the Tribunal's power to determine a claim that sought to invoke federal jurisdiction. The procedural history of the matter in the Tribunal was complex, and need not be repeated here. The appeal to the Court of Appeal was limited to the question of the Tribunal's power to make two costs orders: one made by the Appeal Panel of the Tribunal in the course of ordering that the proceedings pending in the Tribunal be transferred to the Local Court, and the other made in the Consumer and Commercial Division, in dismissing the proceeding for want of jurisdiction. The question was whether a State Tribunal (not being a court within the meaning of s 71 of the Constitution) whose enabling statute contains a general power to order costs, can order costs against an applicant consequential upon its deciding that it has no authority to decide the applicant's claim because it raises a matter within federal jurisdiction.
The Court (Leeming JA, with whom Macfarlan JA agreed, and White JA in a separate judgment) held that the fact that proceedings cannot be heard and determined on their merits by the Tribunal did not mean that the Tribunal was denied the power to order the applicant to pay the respondent's costs, in an appropriate case, of and incidental to the jurisdictional issue: [2020] NSWCA 213 at [17], [74]. Because the Tribunal's determination that it lacked authority to decide the appellant's claim did not involve an exercise of federal judicial power, but was part of its duty to consider the limits of its authority, it had power to make a costs order consequential on that decision. As a consequence, the Appeal Panel had power to make the order for costs of the appeal to it.
There was a divergence of views as to whether the power to order costs under s60 of the NCAT Act was limited to the costs of and incidental to the determination that the Tribunal lacked jurisdiction, or extended to the exercise of that power on the basis of the fact that costs had been incurred in connection with non-jurisdictional aspects of the proceeding, rather than the purported determination of non-jurisdictional aspects of the proceeding. Leeming JA, with whom Macfarlan JA agreed, held (at [29], [32]) that s 60 was available in circumstances where the applicant had conducted the proceedings in a way that unnecessarily disadvantaged the respondents and had been responsible for prolonging unreasonably the time to complete the proceedings. White JA disagreed, and would have allowed the appeal from the costs order made by the Tribunal: [2020] NSWCA 213 at [90], [91].
In both Kelly v Szatow and Wilson, the finding that the Tribunal lacked jurisdiction was made by the Tribunal in the course of its proceedings. In this matter, that finding was made by the Supreme Court on review, concluding that the Tribunal did not have jurisdiction to make the order it had made. The decision of the Federal Court in Khatri v Price (1999) 95 FCR 287; [1999] FCA 1289, discussed in Wilson at [21]-[24] (and see Dal Pont, Law of Costs 4th ed, 2018, [6.13]), would appear to cast doubt on whether the Tribunal could award costs in proceedings where it had purported to exercise a non-existent jurisdiction, even where there was a statutory power to order costs. However, that was not the subject of argument in the present proceeding, and it may be that the nature of the jurisdictional issue has a bearing (see Wilson at [10]). The Tribunal has proceeded on the basis that the agreed position is correct, and that s 60 of the NCAT Act enables the Tribunal to consider whether to make an order for costs of the Tribunal proceedings.

Whether Clr Cornish requires an extension of time

The parties disagreed as to whether the directions at [142]-[144] of the Tribunal decision for the making and consideration of any costs application relating to the Tribunal proceedings remain relevant. No formal order was made by the Supreme Court setting aside those directions, and as observed by Harrison AsJ in Kelly v Szatow at [156], no order as to the costs of the proceedings before the Tribunal was made by Basten J. Had there been a costs order in the Chief Executive's favour, that would no doubt have been set aside by the Supreme Court: Wilson at [5], [18]. The Tribunal is of the view that in the absence of a formal order to that effect, the directions for the making of any costs application were not affected by the orders of the Supreme Court. Accordingly, Clr Cornish's costs application was made outside the time specified in the directions, and an extension of time is required.

Whether an extension of time should be granted

The parties' submissions addressed this issue by reference to the principles in Daoud v Chief Commissioner of State Revenue [2015] NSWCATAD 53, which derive from the Appeal Panel decision in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22. Those decisions were in relation to the exercise of the power conferred by s 41(1) of the NCAT Act, which provides that the Tribunal may, of its own motion or on application by any person, extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction, despite anything to the contrary under that legislation.
In Daoud the Tribunal held: 14. …the discretion to extend time is broad and unfettered. However, it must be exercised judicially and having regard to s 36 of the Act and the need "to facilitate the just, quick and cheap resolution of the real issue in the proceedings". 15. The grant of an extension of time is not automatic. The discretion to extend time is given for the sole purpose of enabling the Tribunal to do justice between the parties. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time. It is also necessary to consider the prospects of the Applicants succeeding in their application. In order to justify the Tribunal extending the time, there must be some material upon which the Tribunal can exercise its discretion: see Gallo v Dawson [1990] HCA 30, 93 ALR 479 at [2] per McHugh J. and the authorities referred to therein. See also Opera Australia Ltd v Carr [1999] NSWADTAP 6 at [16] and Chand v Rail Corporation of New South Wales No 3 [2010] NSWADTAP 11 at [20]. 16. Time limits are set to promote the orderly and efficient conduct of proceedings in the Tribunal, to provide certainty for the parties to proceedings, and to achieve finality in litigation. For these reasons, time limits should generally be strictly enforced unless the interests of justice require that the extension be granted. 17. As set out in Jackson v Land and Housing Corporation at [22] albeit in the context of an Appeal, the relevant considerations in deciding whether to grant an extension of time include: (1) The discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the Applicant Gallo v Dawson [1990] HCA 30, 93 ALR 479 at [2], Nanschild v Pratt [2011] NSWCA 85 at [38]; (2) The discretion is to be exercised in the light of the fact that the Respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision Jackamarra v Krakouer (1998) 195 CLR 516 at [4], Nanschild v Pratt [2011] NSWCA 85 at [39] and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success Jackamarra at [7]; (3) Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider: (a) The length of the delay; (b) The reason for the delay; (c) The Applicant's prospects of success, that is usually whether the applicant has a fairly arguable case; and (d) The extent of any prejudice suffered by the Respondent (to the appeal): Tomko v Palasty (No 2) (2007) 71 NSWLR 61at [55] (per Basten JA) but note also [14], Nanschild v Pratt [2011] NSWCA 85 at [39] to [42]; and (4) It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the Applicant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable Tomko v Palasty (No 2) (2007) 71 NSWLR 61 at [14] (per Hodgson JA, Ipp JA agreeing at [17]) and Molyneux v Chief Commissioner of State Revenue [2012] NSWADTAP 53 at [58] [59].
In both Daoud and Jackson the time limit in question was specified in the relevant legislation, and not by directions made by the Tribunal. In the latter circumstance the principles as stated by the Appeal Panel in Mesiha v Murrell [2017] NSWCATAP 1, in the context of compliance with a direction for service of evidence, would be relevant. After referring to the guiding principle in s 36 of the NCAT Act, and the obligations imposed on the Tribunal under s 38; and the case management principles discussed by the High Court in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27, [2009] 239 CLR 175 at [88]-[111], the Appeal Panel stated: 45. From these cases can be derived the following principles to be applied in determining an application for extension of time in the Tribunal: (1) the just resolution of proceedings remains the paramount consideration; (2) what is a just resolution needs to be understood in the context of the purposes and objectives of the power granted to the Tribunal to resolve disputes and involves a weighing of all relevant matters; (3) speed and efficiency, in the sense of minimum delay and expense are seen as essential to the just resolution of proceedings; (4) a party should be afforded a reasonable opportunity to present its case; (5) there are limits to what is necessary in providing a reasonable opportunity to be heard, which may involve the consideration of delay and cost both to the other party and to the Tribunal; (6) the nature of the case and its importance to the party seeking an extension of time needs to be considered; (7) reasons for failure to comply will generally need to be provided and must be weighed against the effect any delay will have both on the other party and upon the Tribunal; (8) an award of costs may not always be adequate to deal with issues of prejudice, which include wasted time and strain imposed upon litigants; (9) there is no absolute entitlement to an extension of time, even if the consequence of the refusal effectively prevent a party from presenting relevant evidence in support of its case.
Both the principles applicable to s 41 of the NCAT Act, and the Tribunal's general power to extend time for compliance, require the Tribunal to focus on what is required for the just resolution of the proceedings consistent with the guiding principle in s 36 of the NCAT Act, and consistent with the obligations imposed on the Tribunal under s 36(4) and s 38 of the NCAT Act. In the present circumstances the relevant issues are the reasons for delay, and any effect on the Tribunal and the other party.
Assuming in favour of Clr Cornish, as accepted by the Chief Executive, that the relevant date is the date of the Supreme Court order setting aside the Tribunal order, that is, 3 September 2019, the length of time before the costs application was lodged in the Tribunal was just over 12 months. That is significantly longer than any of the time periods applicable in Tribunal proceedings generally, as specified in the Civil and Administrative Tribunal Rules 2014.
The reasons for the delay as submitted by Clr Cornish are summarised at [19] above, and relate primarily to Clr Cornish's application to Council under Penrith Council Policy LG-006, and from 4 June 2020 to what was described as "taking of advice and preparing for the next step in recovery of costs". It was common ground that Policy LG-006 is a Council policy enabling reimbursement of expenses incurred in the discharge of the functions of civic office. No evidence has been provided to confirm the process of seeking reimbursement from the Council, or more relevantly, what occurred between 4 June to 15 September 2020 before the application for costs was made to the Tribunal. Even if the time taken in negotiations with the Council can properly be disregarded, in the absence of any explanation was why it took a further three months to lodge the application, the Tribunal is not persuaded that there is an adequate explanation of the reasons for the delay in making the application.
In submitting that there is no prejudice to the Chief Executive, Clr Cornish submits that the litigation and administrative processes "have been wasteful against the good operation of discipline law concerning elected Councillors", and points to the significant legal costs he has incurred. The Chief Executive submits that there is prejudice in being deprived of the ability to draw a line under the proceedings, and additional time and money in any further assessment of costs. The Tribunal agrees that the latter factor is a relevant prejudice to the Chief Executive; and that the broader interests in providing certainty for the parties to proceedings, and achieving finality in litigation, are also relevant, and point against any extension of time.
The delay was significant, and not adequately explained, and having regard to the importance of finality, the Tribunal is not satisfied that the interests of justice would require that an extension of time to make a costs application should be granted.

Whether there are special circumstances warranting an award of costs

Even if an extension of time were appropriate, the Tribunal would need to be satisfied that there are special circumstances warranting an order for costs. In Edwards v Commissioner for Fair Trading, Department of Customer Service (Costs) [2019] NSWCATAP 249 the Appeal Panel held: 9. Special circumstances are circumstances that are out of the ordinary, but need not be those which are exceptional or extraordinary. These principles are well established and have been consistently applied in this Tribunal: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]; Commissioner for Fair Trading v Edward Lees Imports Pty Ltd (No 2) [2019] NSWCATAP 222 at [8]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [32]. 10. A party's success on appeal is relevant to the question of costs, although it is not determinative: Hammond v Ozzy Cheapest Cars Pty Ltd t/as Ozzy Car Sales [2015] NSWCATAP 65. The Tribunal's discretion to award costs must be exercised judicially and not capriciously: Oshlack v Richmond River City Council (1998) 193 CLR 72 at 81; eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [37].
The discretion to award costs must be exercised having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs: eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [16].
Clr Cornish concedes that he had no favourable basis on which to make an application for costs as at the date of the Tribunal decision on 12 July 2018 as he had lost his application. The issue is whether now, the Tribunal order having been set aside and the proceedings dismissed, Clr Cornish can establish that there are special circumstances warranting an order for costs of those proceedings.
Clr Cornish relied on s 60(3)(c), (d) and (e) of the NCAT Act in support of the submission that there are special circumstances. Clr Cornish submitted that the Tribunal decision was void, and there was never a case to argue, and the matter should not have been brought to the Tribunal. The jurisdictional issue was raised in the Tribunal, and the proceedings were misconceived.
In the Supreme Court proceedings Basten J identified the jurisdictional issue, and considered how it was put to the Tribunal, in the course of considering whether relief should be granted: 59. The Secretary submitted that the present proceedings are "an inappropriate vehicle for review of the validity of [Council resolution CW11] and, at least by inference, because the Council was not joined as a defendant. 60. A ground challenging the validity of Council resolution CW11 was expressly raised in this Court, although it was not placed at the forefront of the grounds supporting the summons. Ground 13 stated that the resolution was "unauthorised because it erroneously reached outside the limited power of censure which the Council had under ss 440AA and 440G of the Act" and that "[t]he Council transgressed its powers and the resolution was ultra vires." The result, ground 13 continued, was that "there was no foundation for any subsequent exercise of power by the [Office of Local Government] or NCAT." 61. With respect to the absence of the Council as a party, the Court drew to the parties' attention the possible relevance of this omission prior to the hearing. However, there are three reasons for concluding that the absence of the Council should not preclude a grant of relief to the applicant on this ground. 62. First, it is by no means clear that the ultimate question is one involving the validity of the Council's resolution. Rather, the question is whether the Acting Chief Executive of the Office of Local Government, being the predecessor to the Secretary, correctly identified the form of misconduct relied upon before the Tribunal. The Council had no power to take the forms of disciplinary action which were available in the Tribunal: it could only refer the matter to the Chief Executive. It did not itself have authority to commence proceedings in the Tribunal; that authority was vested in the Chief Executive. It was the validity of the Chief Executive's referral to NCAT, as a basis for NCAT's jurisdiction which was directly in issue. Appropriately, the successor to the Chief Executive is the active respondent in this Court. 63. Secondly, if it mattered, the issue was raised before the Tribunal, albeit in a somewhat convoluted form [11]. 64. Thirdly, the absence of jurisdiction in the Tribunal is not a matter which can be disregarded [12]. Jurisdiction cannot be conferred by agreement between the parties, or silence as to its existence. With respect to the Tribunal, absent jurisdiction, its decision is void. The Council was not a party to the proceedings in the Tribunal. 65. If there were an issue as to whether the Secretary has had an opportunity to respond with respect to jurisdiction, procedural fairness would demand that that opportunity be accorded. However, the issue was squarely raised in this Court by the grounds of the application and the written submissions, as noted above. It was agitated in the course of oral argument. There is no reason to decline to grant relief, on that basis.
The footnote reference at [63] is to three paragraphs of Clr Cornish's written submissions before the Tribunal.
The transcript of the hearing before the Supreme Court confirms (T, p 6) that the point on which Clr Cornish succeeded in the Supreme Court was raised by Basten J early in the hearing: HIS HONOUR: Putting to one side the level of humiliation, your primary point as I read your submissions is that there was no power in the council to impose mandatory orders of that kind requiring steps to be taken by him, and that its disciplinary powers are limited to censure? KING: Yes, that's one of our points. HIS HONOUR: If that's right, then there can have been no lawful resolution insofar as the resolution sought to require him to do that to form a basis of the chief executive at that stage making a referral to NCAT, and on that basis NCAT has no jurisdiction and its decision is void, KING: That's right, and he put that argument to the learned member, senior member but he dismissed it. HIS HONOUR: I wasn't sure if he put it in those terms. KING: Not as clearly and succinctly as your Honour.
It was put during submissions on behalf of the Chief Executive that that submission was not raised below, "certainly not in the terms it is now raised" (T, p 28).
Clr Cornish conceded in oral submissions in this application that the jurisdictional issue on which Basten J based his decision was not front and centre before the Tribunal. That concession was appropriately made, when regard is had to the Tribunal reasons which confirm at [26] the extensive range of issues raised before the Tribunal: 26. The respondent raised a number of matters in support of his submission that, in effect, the Tribunal did not have jurisdiction to hear the matter, or that the application should otherwise be dismissed pursuant to s 55 of the NCAT Act. He raises seven grounds as to "procedural and jurisdictional issues" in his Reply. Submissions in respect of each ground are developed in his Reply, and amplified in his written submissions. The respondent bases his argument that the application should not be heard or otherwise dismissed by the Tribunal on a number of preliminary, procedural and jurisdictional ways.
The Tribunal considered at [58]-[99] each of the seven jurisdictional and preliminary grounds raised in Clr Cornish's reply to the proceeding, being challenges to the Chief Executive's reliance on legislation that commenced after the conduct in question; the amendment of the application; objections to a number of matters including unsealed copies of documents and lack of a marked up version of an amended application; failure to consider s 470B of the LG Act, which identified circumstances in which a proceeding may be determined without a hearing; there being no disciplinary determination by the Chief Executive before the referral to the Tribunal; there being no departmental investigation; and the interpretation of s 440H(5A) of the LG Act on the preparation of a departmental report. At [100]-[104] the Tribunal considered additional submissions as to jurisdiction made at the hearing. The Tribunal reasons do not indicate that any of those grounds squarely raised the issue of whether non-compliance with Resolution CW11 could found the application before the Tribunal.
The decision of the Supreme Court confirms that the proceedings in the Tribunal lacked a jurisdictional basis: because so much of Resolution CW11 as imposed obligations on Clr Cornish was invalid, there could be no breach of cl 8.10 of the Code of Conduct, and accordingly no basis for a referral to the Tribunal. On that basis, it could be considered that the proceedings initiated by the Chief Executive's referral to the Tribunal were misconceived or lacking in substance, as referred to in s 60(3)(e) of the NCAT Act. However, in a context where there is no assumption that costs follow the event, the Tribunal does not regard the fact that the losing party was ultimately successful where there was ultimately found to be no basis on which the Tribunal could impose a disciplinary sanction on that party, would of itself constitute a special circumstance.
It may be correct, as Clr Cornish submits, that there was never a basis on which the Tribunal could make orders under s 482A of the LG Act. However, in considering the relative strengths of the claims made by the parties as stated in s 60(3)(c), Clr Cornish raised an extensive and complex range of preliminary and jurisdictional issues, some of which were repeated before the Supreme Court, which were determined against him by the Tribunal. What matters is not simply the number of claims, but the substance of those claims: Vitality Works Australia Pty Limited v Yelda; Sydney Water Corporation v Yelda (No 2) [2021] NSWCATAP 66 at [26]. It is not possible to discern from the Tribunal reasons that there was anything about the relative strengths of either party's case that would constitute special circumstances.
The proceedings were undoubtedly complex, identified in s 60(3)(d) as a matter to which regard may be had in determining whether there are special circumstances. That was a result both of the complexity of the legislation, and the way in which the various bases on which jurisdiction was contested was put to the Tribunal. While the jurisdictional point on which Clr Cornish was ultimately successful could, as explained by Basten J, be regarded as not of itself complex, it was not squarely put to the Tribunal, but rather in "a somewhat convoluted form".
At the heart of Clr Cornish's contention that there are special circumstances warranting an order for costs is the proposition that because he was ultimately successful in the Supreme Court that is a special circumstance warranting an order for his costs in the Tribunal proceedings. However, these are not proceedings where a successful party is generally entitled to assume that it will be compensated in the form of an order its costs. To make an order for costs in the present proceedings is a departure from the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs. It was not submitted, and nor is there any basis on which it could be concluded, that there was anything inappropriate in the initiation or conduct of the Tribunal proceedings by the Chief Executive, which might be relevant under s 60(3)(a) or (b). In those circumstances, and having regard to the way in which the jurisdictional issue was identified and argued, the Tribunal does not agree that the ultimate outcome being in Clr Cornish's favour is a special circumstance warranting an order for costs.
The Tribunal is not satisfied that there are special circumstances warranting an order for costs of the Tribunal proceedings, as a departure from the general rule that each party pays its own costs. As a consequence it is unnecessary to consider whether had there been special circumstances, it would be appropriate to make an order for costs.

Order

The order of the Tribunal is:
The application lodged on 15 September 2020 for an order for costs of Tribunal proceedings 2017/212948 finalised on 12 July 2018 is dismissed.

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: 30 March 2021

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