Hennessey v Roads and Maritime Services; G B Holdings Pty Limited v Roads and Maritime Services

The Tribunal's power to award costs

1. The Tribunal's power to award costs is set out in section 60 of the Civil and Administrative Tribunal Act 2013 ("the NCAT Act"). That section is in the following terms: 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 the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014 ) 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. As can be seen from the section, the ordinary rule is that each party to proceedings before the Tribunal is to pay its own costs. Subsection 60(2) gives the Tribunal a wide discretion to award costs where it is satisfied that there are 'special circumstances' that warrant an award of costs. However, the Tribunal must be satisfied there are 'special circumstances' and that these warrant an award of costs. This means there must be circumstances which are out of the ordinary but not necessarily extraordinary or exceptional: see Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at paragraph [11]; Bischoff v Sahade & Owners Corporation SP 62022 [2015] NSWCATAP 196 at paragraph [24].
3. Subsection 60(3) provides that the Tribunal may have regard to a range of factors. These include the subsection 60(3)(g) provision regarding "any other matter that the Tribunal considers relevant." It is clear that the factors set out in section 60(3)(a) to (f) are not meant to be an exhaustive list of what might constitute "special circumstances".
4. However, as the Appeal Panel noted in Obieta v Australian College of Professionals Pty Ltd [2014] NSWCATAP 38, it does not follow that a costs order should be made because some factors are made out.
5. The discretion to award costs must be exercised judicially 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 paragraphs [37] and [48]; Nguyen & Anor v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen & Anor (no 2) [2016] NSWCATAP 168 at paragraph [16].
6. It remains necessary for the Tribunal to determine whether the circumstances are sufficient to amount to 'special' circumstances that justify departing from the ordinary rule that each party bear their own costs. That is, to determine whether the factors relied upon by the Applicant, separately or in combination, establish special circumstances warranting an award for costs.
7. Subsection 60(3)(f) refers to the duty imposed by section 36(3). Section 36(1) of the NCAT Act sets out the "guiding principle" for the NCAT Act and the procedural rules, in their application to proceedings in the Tribunal. These are to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

The Applicants' case

1. The Applicants seek an order for costs of and incidental to the proceedings on an indemnity basis and in the alternative that the Respondent pays the Applicants' costs as agreed, failing agreement as assessed. This application is on the bases that special circumstances exist as set out in subsections 60(3)(d) and (g) of the NCAT Act.
2. They contend that the Respondent acted unreasonably in its decision to suspend the certificate and the licence and that the Respondent rejected an offer of compromise unreasonably.
3. The Applicants accept that Mr Hennessey was charged with an indictable offence and that as a result the Respondent was able to take disciplinary action pursuant to section 42 of the Act. However, they contend that it was not open to the Respondent to make the finding that Mr Hennessey "had been engaging in fraudulent or dishonest conduct or activity": subsection 42(1)(h) of the Act. They contend that it was not open to the Respondent to make this finding on the basis of the criminal charges alone.
4. The Applicants also contend that the Respondent's determinations were made on the basis of unfounded allegations without issuing a show cause notice and without affording them any opportunity to respond.
5. Furthermore, they contend that the decisions to take disciplinary action were unreasonable because the charges against Mr Hennessey were unrelated to the tow truck industry. It is submitted that subsection 42(1)(h) of the Act makes it clear that the alleged conduct must be in connection with the licensee's business as a tow truck operator. The charges did not relate to the licensee's business.
6. The Applicants concede that section 41(4) of the Act provides: (4) However, RMS is not required to conduct any such inquiry, or to invite the licensee or certified driver concerned to show cause, if RMS is of the opinion that it is in the public interest that RMS take immediate disciplinary action under this Division.
7. However, they submit that the Respondent has not produced or relied upon any evidence of any risk to the public. It is submitted that the alleged criminal offences did not present any risk or danger to the public that would warrant an immediate suspension.
8. The Applicants point to the decision in Kalache v Tow Truck Authority of New South Wales [2004] NSWADT 238 in which the Administrative Decisions Tribunal's Deputy President Hennessy stated at paragraph [8]: 8 Public interest. Relevant factors to be taken into account in assessing the public interest are: - the nature and seriousness of the charges; - whether they relate to the activity for which the applicant is licensed; and - whether public safety may be prejudiced if the applicant continues to operate.
9. The Applicants concede that the reference to public interest permits a broad consideration but they submit that central to the concept of the public interest is the safety of the public and the risk to the public from allowing an operator/driver to continue their function while charges/allegations remain unresolved. Public safety may not be the ultimate determinate of public interest but it is central to any such evaluation: Kalache's Investments Pty Ltd v Tow Truck Authority of New South Wales [2004] NSWADT 234 at paragraph [9].
10. The Applicants submitted that the Respondent should have conducted a similar enquiry when assessing the public interest factor pursuant to Section 41 (4) of the Act.
11. The Applicants also contend that they were not given any opportunity to respond to a finding that Mr Hennessey was not a fit and proper person to hold a certificate. They submit that the Respondent did not determine Mr Hennessey's fitness and propriety objectively on the basis of all the evidence because the Applicant was never given an opportunity to defend himself.
12. The Applicants rely on views expressed by the Administrative Decisions Tribunal Appeal Panel in Director General, Transport NSW v AIC (GD) [2011] NSWADTAP 65 at paragraph [48]: "In cases where a suspension is being considered pending finalisation of charges the administrator, and the Tribunal, should, we think, have regard to all that is known to date about the applicant's repute, fitness and propriety, take into account the view it might form on that matter if the charges are proven, and assess the degree of risk to the public that is involved in leaving the driver on the road pending disposal of the charges. It should also take note of the personal hardship that might be caused to the driver. But the ultimate determinant is the public interest. "
13. It is submitted that the Respondent did not take into account all of these matters before suspending the certificate and the licence. If the Respondent had assessed all of the matters appropriately, it would have, at the very least, given Mr Hennessey the opportunity to respond to the proposed disciplinary action before suspending him.
14. The Applicants also contend that the entirety of these proceedings and the costs that have been incurred resulted from the Respondent making a decision to suspend the certificate and the licence without allowing the Applicants an opportunity to respond to this proposed disciplinary action. This decision was unreasonable and excessive in all of the circumstances and the Applicants' costs should be paid by the Respondent.
15. The Applicants also noted that prior to the hearing in the substantive matter they made a without prejudice offer of settlement to the Respondent. The Respondent did not respond to that offer. The Applicants contend that had the Respondent accepted the offer of settlement and simply waited for the criminal proceedings to be resolved, the significant cost of running the proceedings would have been avoided by all the parties and the Tribunal's time would not have been wasted.
16. Following the finalisation of the criminal proceedings the Respondent could then have made a determination to take further disciplinary action against the Applicants if it were necessary.
17. The Applicants submits that the rejection of an offer of compromise is clearly within the scope of section 60 of the NCAT Act, as it is a matter which it may be considered pursuant to section 60(3)(g).
18. The Applicants also noted that the Respondent places significant weight on the Amended Statement of Reasons, which relies heavily upon allegations made by Jason Bermingham in a statement dated 23 March 2016. They submit that the Tribunal must take into consideration the Respondent's failure to investigate these allegations prior to issuing a suspension, particularly in light of Mr Bermingham's criminal history.
19. Further, it is submitted that the reliance on the Amended Statement of Reasons also ignores the fact that the substantive proceedings had already been commenced when the Amended Statement of Reasons was served. The Applicants submit that the Respondent should have invited Mr Hennessey to respond to Mr Bermingham's allegations, prior to making the determinations.
20. It is further submitted that the Tribunal must take into consideration the comments made by His Honour Magistrate Walker in the Local Court regarding the character of Mr Bermingham and the criminal record of Mr Bermingham compared with Mr Hennessey's character and his lack of criminal record.
21. The Applicants submit that in the circumstances the Tribunal should be satisfied that there are special circumstances warranting an award of costs in their favour.

The Respondent's case

1. The Respondent submits that there is no basis for a costs order in favour of the Applicants and that no costs should be awarded against the Respondent.
2. The Respondent disputes the allegation that it acted unreasonably in its decision to suspend the certificate and the licence. It also submits that the issue of whether the Respondent rejected an offer of compromise is not a matter for consideration under section 60.
3. The Respondent contends that, pursuant to section 42 of the Act, it is entitled to take disciplinary action on the basis that "the licensee or certified driver has been charged with an indictable offence". It suspended the certificate and the licence as a result of being notified that Mr Hennessey had been charged with serious indictable offences.
4. The Respondent further contends that the amended Statement of Reasons included additional allegations that formed the basis for its reliance on sub-section 42(1)(h) of the Act. That is, that the Respondent is of the opinion that the licensee has been engaged in fraudulent or dishonest conduct or activity in connection with the licensee's business as a tow truck operator.
5. In regard to the Applicant's contention that the Respondent failed to provide any reason for forming an opinion that it was in the public interest that it take immediate disciplinary action, the Respondent submits that the Applicants have wrongly equated the public interest with a risk to the public.
6. The Respondent referred to the Appeal Panel decision in Commissioner of Police v Toleafoa [1999] NSWADTAP 9 where it was recognised that the public interest is an inherently broad concept which gives the decision maker the ability to have regard to a wide range of factors in choosing whether to exercise a discretion adversely to an individual.
7. Accordingly, it is submitted that the concept of public interest does not need to achieve a level of being "any risk to the public" as indicated by the Applicants.
8. The Respondent made submissions in regard to the fact that issues were raised before the Tribunal that were different to those raised before the Local Court and noted comments by His Honour Magistrate Walker in the Local Court. Mr Wozniak, solicitor for the Respondent submitted: When one considers the Judgment of the Local Court, whilst His Honour is entitled to make the findings that he did against Mr Bermingham, clearly His Honour, unlike the Tribunal, did not have the benefit of any corroborating evidence from various witnesses in relation to the damage sustained as a result of the Bermingham allegations. One can readily accept why the Magistrate would find the allegations by Mr Bermingham to be outrageous when they were not corroborated in any way. The Tribunal on the other hand has been left with considerable evidence from Mr Bermingham, which has all been corroborated. Despite the Magistrate's findings, the allegation made by Mr Bermingham led to the discovery of the vehicle, which was subsequently the subject of the proceedings. Further to note in the decision made by the Local Court, whilst His Honour dismissed the charges, he clearly indicated as follows - "The allegations made by Bermingham against Hennessey are very serious indeed and relate to the complicity of Bermingham with Hennessy in criminal activity against Hennessy's competitors in the panel beating and tow truck business." Further on His Honour indicates - "The other claims by Bermingham, that he aided Hennessy in spraying silicon into rival panel beaters spray booths, putting iron filings into rivals trucks sumps, spraying acid on trucks etc. were not charged by the police and no evidence from rival panel beaters and tow truck operator's was provided to the court to substantiate such claims." This is not the situation in relation to the NCAT proceedings. His Honour then made findings - "Mr Hennessy admits that the VIN plate removed from the Clarke vehicle was welded into the chassis of the Pickles chassis." His Honour then found - "To undertake this procedure was certainly wrong, as the identifier had been interfered with" His Honour further says - "There is no doubt that removing the VIN from the Clarke vehicle and welding it into the Pickles vehicle constitutes an offence." His Honour however dismissed the charges as the matter could not be proven beyond a reasonable doubt that Mr Hennessey acted dishonestly. However His Honour commented - "I am somewhat sceptical of Mr Hennessy's assertions as to his knowledge and belief of such requirements ..." Clearly the findings of the Court would fall within the principals expounded in the decision of [Reddy v NSW Department of Transport and Infrastructure [2010] NSWADT 200]. Despite the fact the charges are dismissed against a defendant, findings of the Local Court are entitled to be taken into account by the Tribunal as the Tribunal operates at a different level of proof. When one considers the finding of fact made by the Magistrate, it is highly conceivable that the Tribunal would have found that the conduct had dishonestly occurred as Mr Hennessey's experience in the industry would clearly indicate to the Tribunal that he was fully aware of what was transpiring in relation to the matter.
9. In regard to the Applicants' assertion that their offer of compromise should have been accepted, the Respondent's position is that the conduct alleged by Mr Bermingham was so serious that it warranted the matters proceeding.
10. Mr Wozniak referred to a number of decision in which an order for costs has been made and submitted that costs are generally awarded to a successful party or to a party where the other party to the proceedings has acted improperly, for example, by not complying with a timetable or directions or failing to attending a hearing. He further submitted that there is no such allegation in this case. He submitted that there is nothing in this case which is out of the ordinary in relation to the usual procedures adopted and the decision made as a result of Mr Hennessey being charged with a serious indictable offence as well as serious allegations made by Mr Bermingham.
11. The Respondent contends that in all the circumstances, given the nature of the jurisdiction and the principle of law that each party pay their own costs, the evidence referred to and the charges that were preferred against Mr Hennessey, there are no special circumstances. It is submitted that the application for costs should be dismissed.

Discussion

1. The Applicants have been critical of the Respondent's determinations to suspend the certificate and the licence. I am satisfied that each of these determinations is within the meaning of "decision" for the purposes of section 6 of the Administrative Decisions Review Act 1997.
2. There are numerous decisions of this Tribunal and the former Administrative Decisions Tribunal which have considered the approach to be taken by the Tribunal in regard to applications for external review. The Tribunal is to determine the correct and preferable decision by way of a merits review. The Tribunal may affirm, vary or set aside the original decision.
3. The hearing is a hearing "de novo" - meaning that the Tribunal may consider the matter from the start including taking into account fresh evidence brought before the Tribunal. The Tribunal is not restricted to the consideration of the material that was before the Respondent, but may have regard to any relevant material before it at the time of the review: Drake v Minister for Immigration and Ethnic Affairs [1979] AATA 179; (1979) 46 FLR 409.
4. As the Tribunal undertakes a fresh determination, an Applicant has the opportunity to address all relevant issues in the proceedings before the Tribunal. This allows consideration of issues that may have not been taken into account by the original decision maker. For example, in the substantive proceedings the Applicants have the opportunity to make submissions that they were not able to make prior to the Respondent's determinations.
5. I note the Respondent's submission that findings of the Local Court are entitled to be taken into account by the Tribunal as the Tribunal operates at a different level of proof. I also note the comments by His Honour Magistrate Walker that were the subject of Mr Wozniak's submissions. The evidence presented before the Tribunal supports those views.
6. As I have indicated above, it is my view that there is no utility in determining the substantive issues. Nevertheless, I do not accept that it was inevitable that the Tribunal would find that the Respondent had not made the correct and preferable decisions. In light of the evidence that was presented before the Tribunal it is conceivable that the Respondent's determinations might have been affirmed notwithstanding that the criminal charges were dismissed.
7. As noted above, the Tribunal must be satisfied there are 'special circumstances' and that these 'special circumstances' warrant an award of costs. This means that there must be circumstances which are out of the ordinary but not necessarily extraordinary or exceptional.
8. I accept that in some circumstances conduct that occurred prior to the commencement of proceedings may constitute 'special circumstances' warranting an award of costs. For example, where through no fault of its own, an Applicant has been placed in the situation where it has been forced to pursue the litigation: see discussion in Cripps and Another v G & M Dawson Pty Ltd and Another; G & M Dawson Pty Ltd and Another v Cripps and Another [2006] NSWCA 81 ("Cripps").
9. However, I do not accept that the approach taken by the Respondent in determining to suspend the certificate and the licence is comparable to the circumstances considered in Cripps.
10. In the present matter, it is not in dispute that Mr Hennessey had been charged with serious indictable offences. Nor is it in dispute that the Respondent was entitled to take disciplinary action pursuant to section 42 of the Act. There is no requirement that the charges be in connection with the Mr Hennessey's involvement in the tow truck industry.
11. In those circumstances, it cannot be said that Mr Hennessey was placed in the situation where he was forced to pursue the litigation purely as the result of the Respondent's conduct. The Respondent did not lay the charges against Mr Hennessey. The Respondent did not take the decisions to suspend the certificate until after Mr Hennessey had been charged.
12. While the Respondent had discretion in regard to whether or not to take disciplinary action against the Applicants, it was reasonable to expect that it would at least consider the possibility of some disciplinary action once it became aware that Mr Hennessey had been charged with serious indictable offences.
13. I agree with the Applicants that the offences for which Mr Hennessey had been charged were not "in connection with the licensee's business as a tow truck operator". This remains the case notwithstanding that the offences could be regarded as "fraudulent or dishonest conduct or activity". I also agree with the Applicants that the amended statement of reasons were not issued until after the proceedings had commenced.
14. However, it appears from the whole of the circumstances that the Respondent had knowledge of the further allegations against Mr Hennessey. If that is the case, there may have been a basis for forming the opinion that Mr Hennessey may have been engaged in fraudulent or dishonest conduct or activity in connection with the licensee's business as a tow truck operator. The proceedings before the Tribunal provided the Applicants with an opportunity to test the issue of whether or not that opinion was warranted.
15. I note the Applicants' submissions in regard to the Respondent's failure to allow an opportunity to provide submissions in regard to the question of whether or not disciplinary action should be taken against them. As noted above, section 41(4) of the Act provides that the Respondent is not required to conduct an inquiry, or to invite the Applicants to show cause in regard to its concerns if it was of the opinion that it was in the public interest that it take immediate disciplinary action. I agree that there is no indication as to why the Respondent was of the opinion that it was in the public interest for it to take immediate disciplinary action. However, the proceedings before the Tribunal provided the Applicants with an opportunity to test the issue.
16. In the circumstances of the proceedings, the Applicants had the benefit of stays of the determinations so the impact of the determinations was significantly reduced.
17. In my view the Respondent's failure to provide the Applicants with an opportunity to provide submissions in regard to the issues of:

• whether or not disciplinary action should be taken; or
• the Respondent's failure to provide reasons as to why it was of the opinion that Mr Hennessey may have been engaged in fraudulent or dishonest conduct or activity in connection with the licensee's business as a tow truck operator; or
• why the Respondent was of the opinion that it was in the public interest that it take immediate disciplinary action against the Applicants does not alter the fact that the Respondent was entitled to take disciplinary action pursuant to section 42 of the Act.

1. The de novo nature of the proceedings before the Tribunal provided the Applicants with an opportunity to address any issues that they considered should be taken into account.
2. In these circumstances I do not consider that the Respondent's conduct in taking disciplinary action against the Applicants amounts to 'special circumstances' for the purposes of section 60 of the Act.
3. Similarly, I do not consider that the manner in which the Respondent has conducted the proceedings amounts to 'special circumstances' for the purposes of section 60 of the Act.
4. I note the Applicants' contention that the Respondent failed to respond to an offer of settlement and that had the Respondent accepted the offer, the significant cost of running the proceedings would have been avoided. In my view, the Respondent was entitled to determine the manner in which it would respond to the application before the Tribunal. It was not under any obligation to accept the Applicants' offer.
5. In my view, the Respondent's failure to accept the offer does not amount to 'special circumstances' for the purposes of section 60 of the Act.
6. I am not satisfied that the factors relied upon by the Applicants, separately or in combination, constitute special circumstances warranting an award of costs.
7. It follows that I should decline to exercise the power to award costs in regard to the proceedings before the Tribunal.

Orders 1. The applications for costs are 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: 25 October 2017