Gaynor v Burns

The relevant law

1. It is not subject of dispute that s 60 of the Civil and Administrative Tribunal Act governs this application. It provides as follows: 60 Costs (1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3), (g) any other matter that the Tribunal considers relevant. (4) If costs are to be awarded by the Tribunal, the Tribunal may: (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on the basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis. (5) In this section:"costs" includes: (a) the costs of, or incidental to, proceedings in the Tribunal, and (b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal.
2. The words "special circumstances" appear in a number of legislative provisions, and have been subject of discussion and comment in respect of the relevant legislation under consideration in each case (see Cabal v United Mexican States [2000] FCA 7) and in this Tribunal (see CPD Holdings Pty Ltd t/a The Bathroom Exchange v Baguley [2015] NSWCATAP 21; Megerditchain v Kurmond Homes Pty Ltd [2014] NSWCATAP 120).
3. The Macquarie Dictionary defines "special" as follows: 1. Of a distinct or particular character. … . (6) Distinguished or different from what is ordinary or usual: special circumstances.
4. The drafting of s 60(1) evinces the intent of the legislature that generally each party to proceedings in the Tribunal shall be responsible for their own costs. Departure from s 60 (1) may occur but only if the Tribunal finds, there are "special circumstances" warranting it to do so. In determining whether there are special circumstances the Tribunal may, in a structured exercise of discretion, have regard to the criteria in s 60 (3) (a) - (g).
5. In Cripps v G & M Dawson [2006] NSWCA 81 Santow JA considered the words "special circumstances" as they appeared in s 88 (1) of the Administrative Decisions Tribunal Act 1997 (NSW) (repealed). That provision enabled the Tribunal to award costs in relating to proceedings before it only if it was satisfied there were "special circumstances warranting an award of costs". Santow JA set out the Tribunal's statement of relevant principle at [18] - [19] of its reasons and concluded that the Tribunal had erred in its application of those principles in failing to find "special circumstances" explaining at [60] 60 It is not necessary to determine whether in the circumstances the appellant committed equitable fraud. In my view it suffices that the conduct of Cripps and Jones, in relying upon their status as the registered proprietors of the freehold and the doctrine of indefeasibility of title to wrongly deny registration and consequently assignment of the lease, so acted as by their conduct to give rise to special circumstances; that is, circumstances that were clearly out of the ordinary and grossly unreasonable so far as the respondent tenant was concerned. On the one hand, the Tribunal correctly concluded that the respondent, through no fault of its own, has been placed in the situation where it has been forced to pursue this litigation. Yet it still failed to find special circumstances. With respect, I consider that the Tribunal was in error in failing to conclude that special circumstances here applied. For this purpose, it suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional. While a finding of "serious unfairness" is not prerequisite to determining that there are special circumstances, it is nonetheless a highly relevant consideration. [our emphasis]

Mr Burn's submissions

1. We do not intend to repeat each and every submission made by the parties in their extensive written submissions. So far as we are able to discern the broad thrust of the submissions of Mr Burns focus firstly on s 60 (3) (d) (the nature and complexity of the proceedings). He points out that Mr Gaynor sought to adduce fresh evidence on the appeal "in the form of an additional 800 pages of material that was not before DP Hennessy" and this action, he asserts, rendered the appeal complex.
2. Secondly, it is submitted, again we infer relying on s 60 (3) (d), that it was Mr Gaynor's conduct at first instance "that complicated the proceedings and misdirected the Tribunal at first instance as to the scope of the Substantive Proceedings". It is also asserted that this conduct in some way "unnecessarily disadvantaged the Respondent" and is relevant under s 60 (3) (a).
3. Thirdly, and it appears the primary submission of Mr Burns is, that Mr Gaynor's conduct in the drafting of the Notice of Appeal relying on "complicated and unnecessary grounds", rather than the identified error relating to Complaints 4-7 is a special circumstance. Thus, it is submitted by failing to properly identify, in a timely manner, the error it is asserted was conceded at the appeal hearing, Mr Burns was denied the opportunity at an early stage to concede the appeal. It is asserted he was further disadvantaged by the late filing of the voluminous material sought to be adduced as fresh evidence on the appeal as this diverted attention away from the "real basis" of the appeal and resulted in Mr Burns incurring unnecessary costs.
4. It is finally submitted that Mr Gaynor did not comply with the duty imposed on him under s 36(3) of the Civil and Administrative Tribunal Act. That provision requires parties to co-operate with the Tribunal and to act in accordance with the guiding principle in the legislation namely to "facilitate the just, quick and cheap resolution of the real issues in the proceedings".

Mr Gaynor's submissions

1. By contrast, in the submissions prepared for Mr Gaynor by his counsel, Mr King, it is submitted that Mr Gaynor did not conduct the proceedings in a way that disadvantaged Mr Burns. It is submitted that "The Deputy President confused the material issues before her". It is noted that "[t]he Tribunal accepted the Appellant's submissions as to the appropriate orders to be made".
2. In dealing with the application to adduce fresh evidence, the submissions acknowledge, at [13], that Mr Gaynor did file a lengthy affidavit "which annexed evidence of each of the many complaints made by Mr Burns against him". It is asserted this evidence was sought to be adduced to demonstrate "the vexatious point on which the appeal ultimately did not turn". Later, in the same paragraph, it is noted: Again, at the hearing of the appeal, both parties focussed on the key issues in the internal appeal and they were conceded or not in issue. Before the Tribunal, if it matters, Mr Gaynor surrendered points pursuant to CAT Act section 36(3).
3. Relying on s 60 (3)(c) it is submitted on Mr Gaynor's behalf that consideration should be given to the fact he was successful in having leave granted and the appeal allowed.
4. At [15] it is asserted that Mr Gaynor was successful in respect of appeal ground 1. That ground, as set out in the Notice of Appeal filed on 30 January 2015, is as follows: Pursuant to s 80 Civil Procedures Act, the decision is wrong in fact and law.
5. We pause to note that s 80 of the Civil and Administrative Tribunal Act (to which we assume Ground 1 in the Notice of Appeal refers) provides in sub-section (2) that an internal appeal may be made in the case of an interlocutory decision of the Tribunal with leave of the Tribunal and in respect of any other decision "as of right on a question of law, or with leave of the Appeal Panel on any other grounds"
6. However, attached to the Notice of Appeal is a document headed "Application for Leave to Appeal". The first ground set out in that document is as follows: Because the decision of the Presiding Magistrate was in error.
7. In dealing with the submission that Mr Balzola's affidavit or conduct led to the error that occurred it is asserted at [17]: …Mr Balzola, consistently with his duty to his client who resided in Queensland merely placed material before the Tribunal, and Mr Burns was entitled to object to the whole or parts of that material but did not do so. He consented to its admission. Further nothing said by the Deputy President on the transcript indicates that the Tribunal apparently misconceived the case before committing itself to Judgement several weeks later . Finally, and most importantly the interlocutory application before the Deputy President made it clear that there were 13 complaints referred to as part of the vexation case, as distinct from the point about addressing the 4 (later 3) complaints of Mr Burns to the ADB the subject of the proposed dismissal. Nothing said by Mr Balzola misled the Tribunal which appears to have proceeded, incorrectly, upon a certainty that Mr Burn's position was strong, and Mr Gaynor was wrong.
8. The submissions then canvas matters which Mr Gaynor seeks to agitate on the re-hearing of the interlocutory application relating to jurisdiction. It is unnecessary we refer to those submissions.
9. It is submitted that the appeal was conceded but that it was necessary for the Tribunal (the appeal panel) to "examine the nature and character of the 4, later 3, complaints, which also exposed the reasons proceeded on a misconception. It was the latter that was conceded on the appeal".
10. The submissions conclude noting that s 60 (3) (e) favours Mr Gaynor who was successful in the appeal, and that he complied with s 36(3) as he did not press the jurisdictional and constitutional points as he already had "a sufficient concession to win the appeal".

Section 60 (3)

1. We consider it is helpful to examine and discuss the matters raised in the submissions, and the transcript before her Honour in the context of s 60 (3) to determine whether there are special circumstances.

Whether either party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings

1. Before commencing our discussion, it is necessary that we point out that although the parties obtained a CD of the transcript of the proceedings before her Honour, they did not obtain the authorised transcript. Mr Burns annexed to his submissions an unauthorised typed transcript of the hearing. We have listened to the CD and satisfied ourselves that the transcript which we quote below accurately reflects the sound recording on the CD.
2. There are several matters that are relevant to this sub-section. First, there is no doubt that Mr Gaynor relied on Mr Balzola's affidavit. In his affidavit Mr Balzola deposed as follows: 1. I am the solicitor for the respondent. 2. This affidavit is made in support of an Application for Interim Orders dated 8 December 2014. 3. I attached and mark with the letter "A" a true and accurate copy of a document titled "Response to Complaints 2014/0766, 2014/0834, 2014/0842" dated 28 November 2014.
3. The annexure to Mr Balzola's affidavit is a 9 page statement of Mr Gaynor. The statement deals in detail with Mr Gaynor's response to Complaints 4 to 7. That document was of no, or at its highest, of very limited relevance to the application for summarly dismissal of Complaints 1, 2 and 3. No attempt was made by Mr Balzola to draw her Honour's attention to the fact that the material relied on by Mr Gaynor related to other complaints. It was the only material filed in support of the application until the late filing of the voluminous material sought to be relied on at the hearing itself. During the course of his submissions Mr Balzola made it clear that reliance was placed on all material before her Honour. Mr Balzola said: We read the whole of the affidavits but we're highlighting specific examples for you.
4. However, Mr Balzola only drew her Honour's attention to specific parts of the late filed affidavit of Mr Gaynor to demonstrate that Mr Burns' conduct in lodging complaints with the Board was vexatious. He did not address the issue of why Complaints 1, 2 and 3 themselves were frivolous and vexatious and ought be dismissed summarily.
5. In his submissions before her Honour, Mr Burns specifically referred to his Points of Claim. Those points of claim relate only to Complaints 1, 2 and 3. He submitted that the matters raised in the three complaints were serious ones that would be substantiated at the final hearing.
6. At the conclusion of his submissions, her Honour pointed out to Mr Burns that: There's been no attack on the substance of the complaints themselves. The only submission and only evidence I've been taken to is about your motivation. So you needn't take me to any of these because there's been nothing said today about the substance.
7. Her Honour's reasons clearly demonstrate in [6] that she relied in reaching her decision on the response to Complaints 4-7 of Mr Gaynor that was annexed to Mr Balzola's affidavit. That is, her Honour read that material as she was requested to do by Mr Balzola without qualification or explanation of its relevance to the application before her.
8. While we note Mr Gaynor's submissions refer to Mr Balzola's duty to his client, they are silent as to Mr Gaynor's duty to the Tribunal including the duty to address the real issue/s in dispute, and the evidence relevant to those issues. This latter duty is particularly relevant in an interlocutory application heard in a busy duty list as was the case in this matter. The material annexed to Mr Balzola's affidavit is detailed and required considerable reading time by her Honour. But as we have earlier noted it was irrelevant to the summary dismissal application before her Honour.
9. We accept that reliance in an application for summary dismissal on material not relevant to that application, together with the late filing of the extensive material at first instance was likely to have unnecessarily disadvantaged Mr Burns.
10. The second relevant matter is the Notice of Appeal and the submissions relied on in the appeal by Mr Gaynor. We accept that the annexure to this document does, in general terms, refer to error (unspecified) by her Honour. The submissions filed in support of the appeal by Mr Gaynor however fail to identify the mistake, which occurred by her Honour basing her reasoning on an examination of the matters raised in the response annexed to Mr Balzola's affidavit.
11. Mr King's submissions at [10] and [11] assert her Honour's "error" was not identifying that the material the subject of the complaint was material published on Mr Burn's own web-site. We note that her Honour dealt with this issue at [15] of her reasons finding it was a factual matter to be determined at the substantive hearing. It was not the basis on which Mr Burns consented to leave being granted to appeal and the appeal being dismissed.
12. We also note that Mr King's submissions on costs explicitly refer to the fact that jurisdictional and constitutional grounds set out in the Notice of Appeal were not relied on in the consent orders made by us.
13. The final matter to which we have given weight is the application to adduce further evidence on the appeal. That material, which was served on Mr Burns, was voluminous. We accept it is highly likely that the serving of that material on Mr Burns distracted attention from the real error and there is merit in his submission that he would have earlier conceded the appeal had the true error been identified by Mr Gaynor.

Whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings

1. While there have been delays in the hearing of the appeal we do not consider those delays can be sheeted home to either party to the proceedings.
2. We reject the submission made on behalf of Mr Gaynor that we should dismiss this application on the basis that Mr Burns did not comply with the orders and directions made by us for the filing of submissions in respect of the costs. We accept that time for filing submissions ran from the receipt of the sound recording of the proceedings before her Honour, and that late filing of the submissions by one day, while regrettable, does not warrant the dismissal of the application for costs.

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 law.

1. Mr Gaynor relies on this sub-section noting that he was successful in that leave was granted, the appeal allowed and the hearing for summary dismissal remitted for re-hearing. Ordinarily, in a jurisdiction where costs follow the event, that fact would be a compelling if not determinative matter to take into account. While we give weight to this factor, it is a matter to be balanced with all other matters relevant to our fact finding exercise in respect of "special circumstances".

The nature and complexity of the proceedings

1. We have already extensively discussed matters relevant to this sub-section in our discussion of s 60 (3) (a). We repeat our earlier findings.

Whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance

1. We do not consider there are any relevant matters to be considered by us under this sub-section.

Whether a party has refused or failed to comply with the duty imposed by section 36 (3)

1. Each party submitted the other party had not acted in accordance with the guiding principle. It is submitted on Mr Gaynor's behalf that he did not extend the appeal hearing by reliance on the jurisdictional and constitutional grounds asserted in the Notice of Appeal.
2. Mr Burns asserts that, had Mr Gaynor's submissions or appeal grounds identified the error at an early point in time, he would have conceded the appeal prior to the hearing. Both these submissions have some substance.

Any other matter the Tribunal considers relevant

1. We note that Mr Gaynor's submissions assert her Honour "misconceived the case before committing [herself] to Judgement several weeks later". This submission is misleading. Her Honour gave oral reasons for decision at the conclusion of the application on 20 January 2015. Her settled written reasons were published several weeks later after a request was received by the Tribunal. Her Honour did not reserve her decision. Further the submissions state: Nothing said by Mr Balzola misled the Tribunal, which appears to have proceeded, incorrectly, upon a certainty that Mr Burns' position was strong, and Mr Gaynor was wrong.
2. We reject, insofar as that submission appears to carry an inference that her Honour was in some way biased against Mr Gaynor, this assertion. The inferred assertion lacks any proper basis.

Conclusions - special circumstances

1. While there is no dispute that a mistake was made by her Honour in dealing with matters relevant to Complaints 4-7 in determining to dismiss Mr Gaynor's application for summary dismissal, that error must lay substantially at the feet of Mr Balzola in asking her Honour to read his affidavit which, in reality was to put before her Honour Mr Gaynor's attack on Complaints 4-7. The consequent error led to the application for leave to appeal.
2. More significantly, the mistake made by her Honour was not identified in the Notice of Appeal or the submissions filed on Mr Gaynor's behalf. The correlation between the response document and her Honour's reasons was first exposed in the submissions made by Ms Nomchong and highlighted in the helpful chronology she prepared. It was then readily admitted by Mr Burns that leave should be granted, the appeal allowed and the matter remitted for re-hearing. It was only after Mr Burns' position was enunciated before the Tribunal that instructions were obtained by Mr King and the appeal allowed.
3. We are satisfied these two matters constitute "special circumstances".

Should the Tribunal make a costs order, and if so on what terms?

1. We note the power to award costs under s 60 (2) is discretionary, and such an order can only be made if the Tribunal finds, as we have, that there are special circumstances.
2. As presently in force, the Suitors Fund Act 1951 (NSW) has no application in this Tribunal so no resort can be made to under that Act for compensation as may occur in civil proceedings in superior courts.
3. Further, it is the plain intent of the legislature that, for the most part, parties should each bear their own costs with the aim of facilitating affordable litigation. However, our discussion below indicates a making of a costs order is appropriate in this case.
4. We are cognisant in this case of the following factors: 1. The material put before the Tribunal by Mr Balzola was the prime factor in her Honour mistakenly relying on an irrelevant document. 2. Mr Burns did not discern the error during the hearing and object to the material being read. But he was met with having to deal with a voluminous affidavit only filed shortly prior to the hearing. In these circumstances his failure to object is unsurprising. 3. Mr Gaynor's Notice of Appeal together with its annexures and submissions on the appeal failed to identify the error which we are satisfied ultimately led to the consent orders allowing the appeal. Further voluminous material sought to be adduced as fresh evidence addressed other issues not before her Honour or relevant to the identified error. 4. The appeal was readily conceded once Mr Burns' senior counsel read the application for summary dismissal, the material before her Honour, the reasons for decision, and identified the error.
5. Weighing and balancing these competing matters, and considering the policy objective of the legislation, we consider the facts warranting the making of the costs order outweigh the matter raised by Mr Gaynor, and that Mr Burns should be entitled to costs of the appeal including the preparation of the submissions on costs.

Should the costs be payable forthwith?

1. Mr Burns seeks an order that costs should be payable "forthwith". An order in those terms is opposed by Mr Gaynor.
2. Rule 42.7(2) of the Uniform Civil Procedure Rules 2015 (NSW) (UCPR) provides that, unless the court otherwise orders, costs awarded in respect of an interlocutory application do not become payable until the conclusion of the proceedings. The underlying policy considerations reflected in this rule are self-evident. But the UCPR do not apply to the Tribunal. Thus, the Tribunal may, in appropriate circumstances, in the exercise of its discretion, order costs shall be payable prior to the conclusion of proceedings. In doing so, it appears to us the same policy considerations that underlie Rule 42.7 and the authorities dealing with the rule are relevant matters to take into account. In Fiduciary Limited v Moriningstar Research Pty Ltd [2002] NSWSC 432 at [11]- [13] Barrett J, in dealing with a similar provision in the Supreme Court Rules then in force, identified factors relevant in respect of making an order for costs of interlocutory proceedings to be payable forthwith. The identified factors are: 1. The matter involves the determination of a separately identified matter. 2. Unreasonable conduct by the party against whom costs have been awarded. 3. Anticipated lengthy delay before the proceedings will be concluded
3. We are satisfied in this case, having regard to our findings, that the first two matters identified by Barrett J are relevant to the exercise of our discretion. Accordingly, we find that the costs in this matter should be paid within a defined period and not at the conclusion of the proceedings.
4. While we accept we could make an order for a specific sum to be paid within a specified time period, there is simply no evidence before us to enable us to make an informed assessment of a proper quantum of costs to be paid. Rather, we propose to provide the parties an opportunity to reach agreement on costs within 28 days of publication of these reasons, failing which costs may be assessed under the Legal Profession Uniform Law Application Act 2014 (NSW) Part 4.3 Div 7 as provided in s 60 (4) of the Civil and Administrative Tribunal Act. The costs shall be payable 14 days after agreement or assessment.

ORDERS 1. The appellant shall pay the costs of and incidental to the appeal of the respondent including the submissions on costs as agreed and failing agreement within 28 days of the date of this order as assessed under Part 4.3, Div 7 of the Legal Profession Uniform Law Application Act 2014 (NSW). 2. The costs agreed or assessed under Order 1 of these orders shall be payable within 14 days of agreement or assessment. 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: 23 July 2015