DVT v Commissioner of Police

Tribunal's Power to Award Costs

1. Section 60 of the CAT Act provides for the Tribunal's powers to make orders for costs.
2. Section 60(1) provides that each party to a proceeding is to pay its own costs: s 60(1). There is express provision for an award of costs under s 60(2) "only if [the Tribunal] is satisfied that there are special circumstances warranting an award of costs."
3. Section 60(3) lists a series of non-exclusive matters which the Tribunal may have regard to when determining whether there are "special circumstances" warranting an award of costs. Section 60(3) provides: 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 s 36 (3), (g) any other matter that the Tribunal considers relevant.
4. If costs are to be awarded, s 60(4) provides that the Tribunal may determine "by whom and to what extent costs are to be paid" and it may order costs to be assessed on the basis set out in the "legal costs legislation" or "on any other basis".
5. Section 60(5) defines "costs" to include the costs of or incidental to proceedings in the Tribunal and costs of or incidental to the proceedings giving rise to the application as well as the costs of or incidental to the application.

Respondents' Submissions on Costs

1. The respondent contended that the factors in s 60(3)(c), (e), (f), and (g) of the CAT Act are in this case relevant to the assessment of whether there are "special circumstances" to warrant an award of costs being made in favour of the respondent.
2. In relation to the ss 60(3)(c) and (e) factors, the respondent contended that the Application had no tenable basis and the making of the Application was frivolous, misconceived or lacking in substance for the following reasons: 1. the withdrawal of the application on the basis that the decision in AVS would be applied in the proceedings, effectively conceded the weakness of the applicant's claim; 2. there was no utility in the Tribunal making an order for better reasons for the internal review decision when the PPIP Proceedings remained on foot; 3. the reasons provided by the respondent were adequate within the meaning of s 49(3) of the ADR Act and the only inadequacy could be attributed to the confidentiality of underlying documents, such that the proceedings were misconceived and lacking in substance; 4. the proceeding was also frivolous on account of the applicant having already commenced the PPIP Proceedings prior to his Application being filed.
3. As to the s 60(3)(f) factors, the respondent submitted: 1. the respondent invited the applicant to withdraw his application at an early stage of the proceedings on 26 June 2020. In seeking to withdraw at a much later stage, when the parties had completed their submissions and the Tribunal was in the process of determining the matter "on the papers" to prepare its reasons, it could not be found that the decision to withdraw the Application was beyond the applicant's control or responsibility: citing Rodny v Strike [2020] NSWCATAP 20 at [113]; 2. the applicant's refusal and failure to withdraw until the last possible moment is inconsistent with his duty to cooperate with the Tribunal to give effect to the guiding principle imposed by s 36(3) of the CAT Act.
4. In relation to "any other matter that the Tribunal considers relevant" referred to in s 60(3)(g), the respondent advance two submissions: 1. the first was that although the applicant was not legally represented, the Tribunal should not have regard to that fact as a reason not to award costs given that: 1. the applicant is experienced in bringing legal and administrative proceedings. The respondent relied upon a list of proceedings involving the applicant in Annexure E to the affidavit of Mr Allchurch; and 2. after being put on notice that an adverse costs order could be made against him since 26 June 2020, the applicant persisted with the proceedings. 1. The applicant has (apparently) made a similar application to the present application in the PPIP Proceedings.
5. The respondent submitted that the proper exercise of the Tribunal's discretion requires consideration of matters in addition to those facts upon which a finding of "special circumstances" may be established.
6. The respondent relied upon Annexure A to the affidavit of Mr Allchurch which provided a "Time Card Listing" for legal fees charged by the respondent's legal representatives up to 9 September 2020 in the sum of $7027.26. The respondent submitted that a lump sum costs order would be appropriate given the relatively modest sum involved, because the process of a cost assessment would be protracted and it would incur the parties with further expense. The respondent contended that having regard to the evidence of Mr Allchurch, it would be fair to award a lump sum and that a sum of $5000 would be appropriate.

Applicant's Submissions on Costs

1. The applicant submitted: 1. on 26 June 2020 he sought an order for the listing of these proceedings together with the PPIP Proceedings, submitting that this was a "reasonable attempt to have both matters combined to avoid wasting the time and resources of the Tribunal"; 2. the respondent purportedly gave his "consent and agreement" on 30 June 2020 that these proceedings would continue separately to the PPIP Proceedings, in the knowledge that there would be additional costs in doing so; 3. the respondent's submissions of 31 July 2020 alleged that the application was "misconceived and lacked utility" but did not contend that the application was "frivolous or vexatious". The submission did not state that costs would be sought by the respondent; 4. the first occasion in which the decision in AVS was brought to the applicant's attention was on receipt of the respondent's submissions of 31 July 2020; 5. the applicant "would not have made the application from the outset or would have withdrawn it at an earlier time had the respondent brought the decision in ABS to his attention"; 6. the respondent has not provided any explanation as to why he did not bring AVS to the attention of the applicant prior to those submissions being served and it was "unreasonable not to do so"; 7. the application "had merit but had to be withdrawn due to nothing more than a procedural irregularity however, the question of the merits of the application ought to await the determination in matter 2020/141477 [the PPIP Proceedings]; 8. withdrawing an application when the facts or law become known does not constitute special circumstances warranting an award of costs (citing several authorities in footnote 1 to those submissions).

Consideration of the Parties' Submissions

1. It was both common ground and uncontentious, that the proceedings - notwithstanding the order that the application be determined on the papers - did not involve a hearing or determination on the merits. So much is accepted by the applicant in his submission set out above: "... the question of the merits of the application ought to await the determination in matter 2020/141477."
2. The respondent acknowledged that in the orders of 2 September 2020, the Tribunal informed the parties that it would "cease [its] consideration of the matter on the papers ...". That statement was put in the orders to confirm that no decision on the merits had been or would be made and instead, the sole matter for the Tribunal's determination was to be the question of costs.
3. The submissions of both parties focused on the question of "special circumstances." Most of the factors set out in s 60 (3) which are relevant to whether there are "special circumstances" warranting an award of costs, are primarily directed to proceedings where the Tribunal has made findings of fact, or there has been some determination of the parties' respective contentions or a decision has been delivered.
4. In Zucker v Burbank Montague Pty Ltd [2018] NSWCATAP 135 at [37], the Appeal Panel described what are "special circumstances" which have been applied generally in this Tribunal: "Special circumstances" are circumstances that are out of the ordinary. They do not have to be extraordinary or exceptional: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11], citing Santow JA in Cripps v G & M Mawson [2006] NSWCA 84 at [60].

General Principles with Respect to Costs

1. In Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 (Oshlack) McHugh J said at [66]-[67] 66. By far the most important factor which courts have viewed as guiding the exercise of the costs discretion is the result of the litigation. A successful litigant is generally entitled to an award of costs. ... 67. The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party[96]. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.
2. In this Tribunal, s 60 of the CAT Act requires a different approach. The starting point is that each party is to pay its own costs: s 60(1). However, if there are "special circumstances" having regard to ss 60(2) and (3), that presumption may be displaced. In addition, the Tribunal must still exercise its discretion having regard to the general principles applicable to awarding costs.
3. As noted in the respondent's submissions, the Appeal Panel in Brodyn Pty Ltd v Owners Corporation - Strata Plan 73019 (No 2) [2016] NSWCATAD 2 to 4 held at [24]-[25]: Relevant to the exercise of that discretion are those facts upon which the finding of special circumstances was based. However, those findings do not constitute the whole of the relevant matters to be considered in deciding what, if any, order for costs should be made. Rather, the principles applicable to awarding costs generally must also be taken into account. These include: 1. costs are compensatory: see Latoudis v Casey (1990) 170 CLR 334 2. that an unsuccessful party bears the costs of the successful party: Oshlack v Richmond River Council [1998] HCA 11 at [134] 3. whether, by reason of the relative success of the parties on different issues and the time taken to determine those that in order for costs based on issue should be made: see e.g. Bostic Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 3014

Costs: No Hearing on the Merits

1. The courts have considered various circumstances in which there will be no order as to the costs of proceedings where there has been no hearing on the merits, such as where the parties have reached a settlement. In those circumstances, where there has been no hearing or determination on the merits, a court or tribunal should only "rarely" determine - hypothetically - who would probably have won the case. In Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; 186 CLR 622, McHugh J said at [31]: It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a Court determining how the course of the proceedings should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial. This will particularly be the case for a trial on the merits would involve complex factual matters where credit could be an issue."
2. One circumstance which may justify an order for costs where there has been no hearing on the merits, is where one party capitulates or surrenders during the course of a proceeding. In those circumstances, the capitulating or surrendering party will usually be required to pay the other party's costs.
3. Court and Tribunal decisions concerning an award of costs following discontinuances or dismissals may require different considerations given the differences between the Uniform Civil Procedure Rules (UCPR) 2005 and the CAT Act. Generally, the UCPR and common law principles reflect the general intent of the "usual order" referred to above by McHugh J in Oshlack. For example, UCPR 42.19 provides for the (rebuttable) presumption that a discontinuing party pays the other party's costs. Discontinuances do not exist in the Tribunal. UCPR 42.20 provides a similar (rebuttable) presumption in relation to proceedings which are dismissed. There is no similar provision in the UCPR for the withdrawal of an application and a dismissal of a proceeding under s 55 (1)(a) of the CAT Act.
4. However, the effect of a dismissal under s 55 (1)(a) of the CAT Act has the same effect discontinuance. The proceedings are brought to an end without a hearing on the merits.
5. In Kiama Council v Grant [2006] NSWLEC 96 (Kiama), a decision approved by the NSW Court of Appeal in Hunter Development Corporation v Save Our Rail NSW Incorporated (No 2) [2016] NSWCA 375, Preston CJ said at [80]: "[80] The principles that emerge from these cases are that in a civil enforcement or judicial review case where there has been no hearing on the merits: (a) where one party effectively surrenders to the other party by: (i) discontinuing without the consent of the other party; or (ii) giving undertakings to the Court or submitting to the Court making orders against the party substantially in the terms or to the effect claimed by the other party; the proper exercise of the costs discretion will ordinarily be to make the usual order as to costs, unless there is disentitling conduct on the part of the other party; and (b) where some supervening event or settlement so removes or modifies the subject of the dispute that no issue remains except that of costs, the proper exercise of the costs discretion will ordinarily be to make no order as to costs unless: (i) one of the parties has acted so unreasonably that the other party should obtain the costs of the action; or (ii) even if both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried so that the party should obtain the costs of the action.
6. The Appeal Panel in D Constructions Pty Ltd v Walsh [2020] NSWCATAP 91 had regard to the passage set out above by Preston CJ in Kiama and said at [30]: It will be apparent, of course, that a dismissal of an appeal following the withdrawal of the appeal by an appellant may be surrender per Preston CJ's first category of case, or it may be the result of a supervening event or settlement referred to in the second category. Thus, the relevant circumstance is not so much the form the surrender may take (be it a withdrawal, dismissal by consent, discontinuance etc), but the reason for or circumstances giving rise to it. Thus, a dismissal following a settlement reached between the parties would be considered differently to a dismissal which was tantamount to a surrender.
7. Therefore, and having regard to "the principles applicable to awarding costs generally" (per Brodyn), where there has been no determination on the merits and a party seeks to withdraw or discontinue without the consent of the other party, as in this case, it is necessary to consider the circumstances causing that withdrawal. The reasons, the timing and the manner of the applicant's intention to withdraw his Application should be considered to better inform the Tribunal whether the withdrawal may be characterised as a form of surrender/capitulation or something else.

The Withdrawal: A Surrender or Capitulation?

1. The respondent's submissions of 31 July 2020 relevantly stated at paragraph [31]: The interaction between the duties imposed by s 49 and s 58 of the ADR Act has previously been considered by both the Tribunal and Supreme Court. In AVS Group of Companies Pty Ltd v Commissioner of Police [2009] NSWSC 1391, Davies J considered that the obligation to provide reasons pursuant to s 49 of the ADR act was eclipsed by the obligation under s 58 (1) (h) on the commencement of administrative review proceedings.
2. The respondent's submissions then set out paragraphs [63] to [66] from AVS and concluded at [30]: ...Given the above consideration, the respondent submits that the respondent's [sic] application pursuant to s 52, brought over a month after his application for administrative review and more than a week after a copy of the internal review decision was lodged with the Tribunal in those proceedings, is misconceived and lacks utility. There remains no obligation on the respondent pursuant to s 49 where the respondent is now under an obligation to lodge a statement of reasons pursuant to s 58 (1) (a) (and has done so) and therefore no obligation which would give rise to the Tribunal's power to make an order pursuant to s 52 (2).
3. The respondent had already notified the applicant on 26 June 2020 that it considered the proceedings were misconceived. Whether the decision in AVS was known but not drawn to the attention of the applicant by the respondent at that time is irrelevant. Upon becoming made aware of AVS, the applicant did not then seek to promptly withdraw his Application. He did not seek to withdraw his Application until 27 August 2020.
4. I am satisfied from the submissions made by both parties that the withdrawal was occasioned solely or predominantly because of the appellant becoming aware or realising the effect of the decision of the NSW Supreme Court in AVS. The respondent brought AVS to the attention of the applicant in the submissions dated 31 July 2020. Although the applicant submits that it was unreasonable on the part of the respondent to not make him aware of that decision earlier in time, I do not accept that there was any deliberate or unreasonable conduct on the part of the respondent in first mentioning it in his first set of submissions. In part, the purpose of an exchange of informed submissions is to place the other party on notice of the strengths of a party's case, underpinned by any relevant authorities. As set out above, the respondent submitted: The applicant would not have made the application from the outset or would have withdrawn it at an earlier time had the respondent brought the decision in ABS to his attention.
5. On 1 August 2020 submissions had been exchanged, the matter was ready for "hearing" and the Tribunal ordered it to be determined "on the papers".

Can a withdrawal constitute a "special circumstance"?

1. The applicant referred to some decisions of the Tribunal in a footnote to his written submissions to support his contention that the timing of a withdrawal does not give rise to "special circumstances".
2. The timing of a withdrawal is a matter for the party seeking to withdraw. The question of whether a withdrawal is made promptly is often concerned with whether any costs have been incurred and wasted and could have been avoided by a prompt withdrawal. A prompt withdrawal in such a case may not constitute "special circumstances" to warrant an award of costs.
3. The factual circumstances in each decision relied upon by the applicant are quite different to the matters under consideration here. Those decisions generally pertain to the question of whether there are special circumstances because of the withdrawal occurring at a very early stage of a proceeding. Each case must be decided on its own facts.
4. In this case, I am considering the question of wasted costs when the withdrawal was made after a full exchange of submissions, after the matter had been set down for "hearing" and when it was awaiting a determination "on the papers," such that having regard to the reasons given by the applicant to explain the withdrawal, does the withdrawal amount to surrender/capitulation?
5. In relation to a withdrawal of a notice of motion in the course of a hearing, Bell P and Gleeson JA in Khanna v Bond Realty Pty Ltd [2019] NSWCA 128, held at [31]: "The 26 October notice of motion which was dismissed was a notice of motion which Mr Khanna sought to withdraw in the course of the hearing and it was reasonable that the First Respondent be awarded its costs in relation to that notice of motion. There was and is no good reason why a party that has prepared to meet a notice of motion should be deprived of its costs if a party that has filed it withdraws it in the course of argument. Whilst costs will not always be ordered in such circumstances (see Re Minister for Immigration & Ethnic Affairs; ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 at 624-625; see also Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84), that is not an invariable rule and there was no error of principle in the primary judge's decision to award costs in relation to the 26 October 2018 notice of motion."
6. I am satisfied that the applicant has effectively surrendered or capitulated to the respondent at a stage when the matter was to be "heard", having accepted the respondent's submission that the decision of the Supreme Court in AVS did not support the matters sought in his Application. In seeking to withdraw the Application when he did, the respondent had by that time incurred legal expenses "thrown away" in preparing submissions and evidence (including "confidential" evidence) for the hearing. The respondent should be compensated for some of its costs.

Quantum of Costs

1. I have had regard to "Time Card Listing" for legal fees charged by the respondent's legal representatives up to 9 September 2020 in the sum of $7027.26. I am satisfied that the costs come within the definition of "costs" in s 60(5) of the CAT Act and are recoverable on that basis. I accept the evidence of Mr Allchurch that the legal fees charged by the respondent's legal representatives are significantly reduced rates, compared to those which the respondent has obtained under tender from external legal practices.
2. Having regard to the decision of the Appeal Panel in 203 Castlereagh Street Pty Ltd v Skybloo Holdings Pty Ltd [2017] NSWCATAP 29, I accept the respondent's submission that a lump sum costs order would be appropriate. The amount involved is "relatively modest", the process of a cost assessment would be unduly protracted and it would cause the parties to incur further expense.
3. I am satisifed, having regard to the evidence of Mr Allchurch, that it would be fair to award a lump sum for costs and that a discounted sum of $5000 would be appropriate: see Nastav v Commissioner of Police, NSW Police Force [2013] NSWCATAD 164 at [20] - [21]; Ajami v Commissioner of Police, NSW Police Force [2018] NSWCATAD 95.

Orders

1. I make the following orders: 1. Pursuant to ss 60 (2) and (4) of the Civil and Administrative Tribunal Act 2013, the applicant is to pay the respondent's costs of the proceedings in the sum of $5000 within 28 days of the publication of these Reasons. 2. The proceedings are dismissed pursuant to s 55 (1) (a) of the Civil and Administrative Tribunal Act 2013.

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

Amendments 01 November 2021 - Citation delimiter included 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: 01 November 2021