mixed. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 the Tribunal dispenses with a hearing of the competing costs applications. The application for costs of the Applicant is dismissed....
Key principles
Pursuant to s 60(1) of the Civil and Administrative Tribunal Act 2013 each party to proceedings in the Tribunal is to pay the party's own costs unless the Tribunal is satisfied...
Special circumstances are circumstances that are out of the ordinary but need not be extraordinary or exceptional, and the discretion must be exercised judicially having regard...
Where a referral application pursuant to s 73(5) of the CAT Act is discontinued without a hearing on the merits and significant disputed issues of fact exist as to service of the...
The principles governing costs in proceedings that settle without a determination on the merits, including that there will usually be no order as to costs where both parties have...
Issues before the court
Whether either party had established special circumstances under s 60(2) of the Civil and Administrative Tribunal Act 2013 warranting a costs order...
Plain English Summary
A company asked the Tribunal to refer a man for contempt because he allegedly ignored a summons for documents over many months. After he finally produced some documents the company dropped the contempt case. Both sides then asked the Tribunal to order the other to pay their legal costs, each blaming the other for wasting time and money. The Tribunal decided the dispute on written submissions alone and ruled that, because the facts about whether the man had proper notice of the summons and whether his production was adequate were hotly disputed, it could not decide who was at fault. Without being able to make those findings it could not say that "special circumstances" existed to justify ordering costs. Both costs claims were dismissed and each side must bear its own costs.
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Deep Dive
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What happened
Cited legislation
2 cited instruments linked from this judgment.
Home789 Resources Pty Limited commenced enforcement proceedings in the New South Wales Civil and Administrative Tribunal by filing, on 25 January 2022, an application under s 73(5) of the Civil and Administrative Tribunal Act 2013 (CAT Act) seeking the referral of Zheng Shang and several other named persons to the Supreme Court to be dealt with for contempt. The contempt allegation centred on Mr Shang's alleged failure to comply with a summons for production of documents issued on 6 July 2021. The applicant asserted that no documents were produced on the original return date of 23 July 2021, nor on any of the numerous adjourned return dates: 30 August, 31 September, 7 October, 21 October, 26 October, 18 November, 17 December or 21 December 2021.
By the time the referral application came before the Tribunal the controversy had narrowed to Mr Shang alone. The matter was listed for directions on 16 February 2022, adjourned to 2 March 2022, and on 3 March 2022 Mr Shang's solicitors confirmed he had notice of the application. On or about 13 April 2022 Mr Shang produced a quantity of documents. The applicant regarded that production as "vastly inadequate" but nonetheless elected to discontinue the referral application. Both parties then filed competing costs applications. The applicant sought its costs of the referral proceeding on the basis that Mr Shang's earlier non-compliance had caused it to incur substantial additional expense, including the issue of further summonses to third parties. Mr Shang resisted that claim and cross-applied for his own costs, arguing that the referral application had been brought prematurely, that incorrect addresses had been used for service, and that he had responded promptly once properly notified.
The Tribunal directed the filing of evidence and submissions. The applicant relied on two affidavits of Ammaar Ali sworn 11 March and 20 May 2022. Mr Shang relied on his own affidavit of 24 July 2022 and its exhibit. Both parties accepted that any costs order required the demonstration of "special circumstances" under s 60(2) of the CAT Act. The applicant contended that Mr Shang had unnecessarily disadvantaged it, unreasonably prolonged the proceedings, given no credible explanation for non-compliance, displayed a wilful and contumacious attitude, and breached the duty imposed by s 36(3). Mr Shang countered that the applicant had used the wrong service details for many months, had failed to re-serve the summons once correct details were known, and had pressed the contempt application even after he produced documents.
The first procedural question was whether the costs applications could be determined on the papers. The applicant submitted that they were suitable for that course; Mr Shang did not address the point. The Tribunal was satisfied that the extensive written material enabled the issues to be adequately determined in the absence of the parties (s 50(2)), that dispensing with a hearing was consistent with the guiding principle in s 36, and that both parties had been afforded an opportunity to make submissions on the proposed order. Accordingly, on 19 August 2022 Principal Member Coleman SC ADCJ ordered that a hearing be dispensed with, dismissed both costs applications, and published reasons that carefully avoided resolving the contested factual narrative.
Why the court decided this way
The Tribunal's reasoning begins with the statutory starting point in s 60(1) of the CAT Act: each party pays its own costs. A departure is permitted only if the Tribunal is satisfied that special circumstances warranting a costs order exist (s 60(2)). Section 60(3) supplies a non-exhaustive list of matters that may be considered, including whether a party has conducted proceedings in a way that unnecessarily disadvantaged another, unreasonably prolonged the time taken, or failed to comply with the s 36(3) duty to assist the Tribunal to achieve the just, quick and cheap resolution of the real issues. The member emphasised that special circumstances are those "out of the ordinary" but need not be extraordinary or exceptional, citing Kadsielski v Guca 1 Pty Ltd [2018] NSWCATAP 223 at the paragraph immediately preceding the consideration section, Gizah Pty Ltd v AXA Trustees Ltd (No 2) [2001] NSWADT 164 and Brunsprop Pty Limited v Joanne Hay & Wes Davies [2015] NSWCATAP 152. The discretion must be exercised judicially and with regard to the default position that parties bear their own costs (eMove Pty Limited v Naomi Dickinson [2015] NSWCATAP 94).
Crucially, the referral application had never been heard on its merits. The Tribunal was therefore unable to make any findings about what had occurred between July and December 2021 concerning service of the summons or the adequacy of Mr Shang's eventual production. The member observed that costs applications are ordinarily made after a merits determination that informs the s 60(3) analysis. In the absence of such findings the scope for either party to succeed was "necessarily limited".
The Tribunal turned to the principles governing costs in proceedings that settle or are discontinued without a hearing on the merits. It adopted the approach in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 that there will usually be no order as to costs where it cannot be said that one party has simply capitulated, unless one party has acted unreasonably in bringing or defending the proceeding. The member cited Hill J in Australian Securities Commission v Aust-Home Investments Limited [1993] FCA 585; (1993) 44 FCR 194 to the effect that it will rarely be appropriate for a court (or Tribunal) to determine the merits on a hypothetical basis, especially where complex factual matters or credit are involved. Reference was also made to Lake Burrendong State Park Trust v Thompson [2011] NSWSC 1554, Ferguson v Hyndman [2006] NSWSC 538, Newcastle Wallsend Coal Co Pty Limited v Industrial Relations Commission (NSW) [2006] NSWCA 129, Muhibbah Engineering (M) BHD v Trustee Company Limited [2009] NSWCA 205, Luxottica Retail Australia Pty Limited v Grant [2009] NSWCA 378 and Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84. The consistent theme extracted was that, if both parties have acted reasonably up to the point of settlement or discontinuance, the proper exercise of the costs discretion is to make no order.
Applying those principles, the Tribunal could not conclude on the balance of probabilities that the applicant had acted unreasonably in commencing the referral, nor that Mr Shang had acted unreasonably in defending it. The evidence did not establish capitulation by either side, nor that one party would inevitably have "won" had the referral been heard. Because the underlying factual disputes could not be resolved on the papers, none of the s 60(3) factors could be made out. The applicant's claims that Mr Shang had conducted the proceedings so as to disadvantage it, prolonged them unreasonably, given no credible explanation, displayed a contumacious attitude, or breached s 36(3) could not be accepted in the absence of factual findings. Equally, Mr Shang's contentions that the application was vexatious or that the applicant had caused him unfairness and costs by proceeding on incorrect service details could not be upheld without resolving the very disputes that had led to discontinuance.
The member also noted the nature of a Tribunal summons under s 48 and contrasted it with a court subpoena, while acknowledging that authorities on subpoena contempt (including James v Cowan [1929] HCA 46; (1929) 42 CLR 305, Registrar of the Supreme Court, Equity Division v McPherson (1981) 1 NSWLR 688, Registrar of the Court of Appeal v Maniam (No 1) (1991) 25 NSWLR 459, O'Born v Commissioner for Government Transport (1959) 77 WN (NSW) 81 and Markisic v Keelty [2005] NSWSC 1124) were instructive. He recorded that wilfulness is the minimum mental element for contempt by disobedience, but again emphasised that the Tribunal could make no finding on that issue. The legal principles for a contempt referral were summarised by reference to DVI v ZIT [2021] NSWCATEN 4 at [5]-[12], yet without factual findings those principles could not be applied.
In short, the inability to resolve contested facts on the papers was determinative. Neither party had taken the proceedings "out of the ordinary" in a manner that engaged s 60(2). Both costs applications were therefore dismissed.
Before and after state of the law
Prior to this decision the statutory costs regime in NCAT had been settled for nearly a decade. Section 60 of the CAT Act deliberately departed from the ordinary "costs follow the event" rule applicable in courts. The default position is that each party bears its own costs; a costs order requires affirmative satisfaction that special circumstances exist. Appellate decisions such as eMove Pty Limited v Naomi Dickinson [2015] NSWCATAP 94 and Kadsielski v Guca 1 Pty Ltd [2018] NSWCATAP 223 had clarified that special circumstances are those out of the ordinary but need not reach the level of being exceptional, and that the discretion is to be exercised judicially while remembering the statutory presumption. The authorities on costs in settled or discontinued proceedings without a merits hearing were also well developed. The High Court's decision in Lai Qin (1997) 186 CLR 622 had been applied repeatedly in New South Wales superior courts (Lake Burrendong, Nichols v NFS Agribusiness, Luxottica) to the effect that a court or tribunal should not embark on a hypothetical trial of complex factual disputes merely to resolve costs. Costs orders in such cases are rare and usually require clear unreasonableness apparent on known or agreed facts.
This judgment does not change the law. It applies the existing statutory text and the accumulated case law to a concrete factual setting: a discontinued s 73(5) referral based on alleged non-compliance with a s 48 summons. It confirms that the Lai Qin principles are "instructive" in the Tribunal and that the s 60(3) factors cannot be enlivened where the Tribunal cannot make the necessary factual findings on the papers. The decision also records, without deciding, that a failure to comply with a Tribunal summons is capable of constituting contempt under s 73(2) referable under s 73(5), while noting the jurisdictional question is "less than straightforward".
The state of the law after the decision is therefore one of reinforced orthodoxy. Practitioners now have a clear illustration that, in the enforcement jurisdiction, a costs application following discontinuance of a contempt referral will fail if the underlying allegations of service failure, notice and adequacy of compliance remain genuinely contested. The Tribunal will not conduct a mini-trial on affidavits to resolve credit or factual disputes for costs purposes alone. The decision underscores that the compensatory rationale of costs orders (Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534) cannot be invoked where the Tribunal cannot identify a successful party or unreasonable conduct.
Key passages with plain-English translation
The following passages from the Principal Member's reasons encapsulate the ratio and are grounded squarely in the text.
At the opening of the "Consideration" section (immediately after the review of authorities) the member states: "The principles with respect to costs of settled proceedings emerging from the authorities are instructive for present purposes, particularly given the requirement of s 60(2) of the CAT Act that a party establish 'special circumstances' in order to obtain an award of costs, and that the matters to which regard may be had pursuant to s 60(3) of the Act for the purpose of that determination are based on facts which are agreed or which have been found at a hearing." Plain English: Because the contempt referral was never decided on its facts, the usual tools for deciding who should pay costs are missing. The Tribunal cannot plug that gap by guessing who would have won.
In the same section the member writes: "In the present circumstances, the Tribunal is unable to find on the balance of probabilities that the Applicant acted unreasonably in commencing the referral application, or that the Respondent acted unreasonably in defending it." Translation: Both sides told different stories about whether the summons ever reached Mr Shang and whether his later production was enough. Without cross-examination or a hearing the Tribunal cannot choose which story is true, so it cannot label either side as having behaved unreasonably.
On the nature of special circumstances the reasons record: "Special circumstances are circumstances that are 'out of the ordinary', and do not have to be extraordinary or exceptional (Kadsielski v Guca 1 Pty Ltd [2018] NSWCATAP 223). Each case turns on its own particular facts... and depends on the circumstances of the individual case." Translation: "Special" does not mean unique or shocking; it means something beyond the run-of-the-mill costs and delays that occur in any contested matter. Every case is judged on its own evidence, but here the evidence did not rise above the ordinary.
Finally, the member adopts the conclusion from Lake Burrendong at [83]: "if it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled, or its further prosecution became futile, the proper exercise of the costs discretion will usually mean the Court will make no order as to costs of the proceedings." In context this is applied to the Tribunal: because reasonableness on both sides could not be disproved, the default rule in s 60(1) prevailed.
What fact patterns trigger this precedent
This decision will be triggered whenever a party files a s 73(5) referral for alleged contempt arising from non-compliance with a s 48 summons, the alleged contemnor later produces documents (even if asserted to be inadequate), the referral is discontinued before a contested hearing, and both sides then seek costs on the basis that the other acted unreasonably. The critical factual element is the existence of genuine disputes about (a) whether and when the summons came to the attention of the addressee, (b) whether service was properly effected, and (c) whether the documents ultimately produced satisfy the terms of the summons. Where those disputes cannot be resolved on the papers without resolving credit or conducting a de facto trial, the Lai Qin principles applied through s 60 will ordinarily result in both costs applications being dismissed.
The precedent is not engaged if the underlying facts are agreed or if one party has clearly capitulated in circumstances that demonstrate unreasonableness apparent from the face of the correspondence or court file. It is also distinguishable if the Tribunal has already made factual findings in the principal proceedings that can be imported into the costs determination. The decision is limited to the enforcement jurisdiction and to referrals that settle prior to any s 73 hearing; it does not alter the ordinary approach to costs in fully litigated matters where findings on the merits are available.
How later courts have treated it
Although the decision is itself a 2022 first-instance Tribunal judgment, it carefully synthesises and applies a consistent line of superior-court authority. It treats Lai Qin as supplying the governing framework for costs in unresolved matters and cites intermediate appellate decisions (Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84, Muhibbah Engineering, Luxottica) without criticism. The member also cites and follows the Tribunal's own recent authorities on the meaning of special circumstances (Kadsielski, Brunsprop, eMove) and the elements of a contempt referral (DVI v ZIT [2021] NSWCATEN 4). The judgment therefore stands as a straightforward application rather than a development of principle. Subsequent benches can be expected to cite the decision for the proposition that, in the specific context of a discontinued s 73(5) referral based on disputed compliance with a summons, the Tribunal will not embark on a factual inquiry on the papers for costs purposes. The decision reinforces the strictness with which the s 60(2) gateway is guarded when the merits remain undetermined.
Still-open questions
Several questions are expressly or implicitly left open. First, the member notes that the jurisdictional basis for referring a failure to comply with a Tribunal summons as contempt under s 73(2) and (5) is "less than straightforward" but finds it unnecessary to reach a concluded view; that issue therefore remains for a case in which the point is fully argued. Second, the precise mental element required for contempt by non-production—particularly the boundary between wilful disobedience and mere oversight or mistaken belief about service—remains unresolved on these facts. Third, the circumstances in which late production after the filing of a referral can be said to "purge" contempt, or conversely can still ground a costs order, are not settled; the Tribunal simply could not reach the factual threshold.
A further open question is the evidentiary threshold that would allow a costs application to succeed on the papers. The decision implies that only where the unreasonableness or special circumstances are demonstrable from agreed correspondence or court records, without the need to prefer one affidavit over another, will a costs order be available. How that line is drawn in future enforcement matters—especially where ASIC searches, email service and personal service are involved—will require further decisions. Finally, the interplay between the s 36 guiding principle and the costs discretion in contempt referrals that are discontinued after partial compliance remains to be explored in a case where clearer evidence permits positive findings.
Most practitioners do not realise that the costs protection apparently offered by a successful contempt referral can evaporate entirely if the respondent produces even inadequate documents and the applicant discontinues. The Tribunal's unwillingness to resolve service and compliance disputes on the papers means that the expense of issuing the referral, preparing evidence and responding to it will often lie where it falls. Careful attention to proof of service before filing, and early without-prejudice correspondence that narrows factual disputes, are therefore essential.
Catchwords
Ex Parte Lai Qin [1997] HCA 6
Judgment (9 paragraphs)
[1]
Introduction
On 25 January 2022 Home789 Resources Pty Limited (the Applicant) filed an application seeking the referral of Zheng Shang (the Respondent) and a number of other named persons to the Supreme Court to be dealt with for contempt (the referral application). The application was made pursuant to the provisions of s 73(5) of the Civil and Administrative Tribunal Act (CAT Act) and was based on alleged breaches of an order of the Tribunal.
Prior to its determination, the Applicant discontinued the referral application, which, by that time, had become only against the present Respondent.
The Applicant sought that the Respondent pay its costs of the referral application. The Respondent resisted the Applicant's claim for the costs of the referral application and sought an order that the Applicant pay his costs of the application.
The Tribunal made directions for the filing of evidence and submissions in support of the competing costs applications. On 10 June 2022 the Applicant filed submissions in support of its claim. The Applicant relied upon two Affidavits of Ammaar Ali, sworn 11 March 2022 and 20 May 2022. On 26 July 2022 the Respondent filed submissions. In support of his claim, the Respondent relied upon an Affidavit sworn by him on 24 July 2022 and the Exhibit to that Affidavit.
Whether there should be a hearing
The first issue requiring determination is whether the competing applications should be determined "on the papers" and without a hearing. The Applicant submitted that the competing applications were "suitable to be determined on the papers" (48). The submissions of the Respondent did not engage with the issue
Section 50(1) of the CAT Act provides that a hearing is required for proceedings in the Tribunal unless the Tribunal makes an order under dispensing with a hearing (s 50(1)(c)). Section 50(2) of the CAT Act provides that the Tribunal may make an order dispensing with a hearing "if it is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Tribunal". The extensive written submissions of the parties satisfy the Tribunal that the issues for determination can be adequately determined "on the papers" and in the absence of the parties.
The Tribunal is further satisfied that, in the present circumstances, dispensing with a hearing is consistent with the "guiding principle" articulated in s 36 of the CAT Act, and facilitates the "just, quick and cheap resolution of the real issues in the proceedings".
Pursuant to s 50(3) of the CAT Act, the Tribunal is satisfied that the parties have been "afforded" the opportunity to make submissions about the proposed order which, to the extent that any party has, have been taken into account. In the circumstances, the Tribunal orders, pursuant to s 50(2) of the CAT Act that a hearing be dispensed with.
[2]
Background
On 6 July 2021, a summons for the production of documents was issued to the Respondent. The Applicant alleged that on the return date of the summons, 23 July 2021, the Respondent produced no documents, that on the adjourned return date of the summons, 30 August 2021, no documents were produced, and that the summons was then further adjourned to 31 September 2021. The Applicant alleged that no documents were subsequently produced on the summons on 31 September 2021, 7 October 2021, 21 October 2021, 26 October 2021, 18 November 2021, 17 December 2021 or 21 December 2021.
The return date of the referral application was 16 February 2022, on which date it was adjourned to 2 March 2022. On 3 March 2022 the Respondent's solicitors acknowledged that he had notice of the referral application.
The Applicant alleged that the Respondent first produced documents on or about 13 April 2022, but that he did so "vastly inadequately", notwithstanding which it discontinued the referral application.
The Respondent disputed that the summons came to his attention during 2021, for a variety of reasons. The Respondent "heavily disputed" that he had not produced documents in accordance with the summons when, he contends, it ultimately came to his notice.
In substance, the outcome of the present applications turns materially on what is alleged by each party to have occurred, or not occurred between July and December 2021 with respect to the summons to the Respondent to produce documents, matters about which the Tribunal is unable to make findings of fact.
[3]
Submissions of the parties
The Applicant submitted (40) that, due to the Respondent's non-compliance with the summons, "additional costs were incurred in that additional summonses were issued [to] other parties identified through the documents" produced by the Respondent on 13 April 2022. Included in the costs claim by the Applicant (41) were the costs of filing the summonses, the payment of conduct money, costs with respect to attendances on the return of summonses to various third parties, all of which were submitted to be "a direct result of Shang's failure to comply with the summons". The Applicant further submitted (42) that costs were incurred as a "direct consequence of Shang's repeated failures to comply with the summons" on the 2021 dates which have been recorded earlier in these reasons.
It was further submitted (43) that, after the filing of the referral application, there was no appearance by the Respondent on the original and adjourned return dates. The Applicant submitted, correctly in the Tribunal's view, that its application was governed by the provisions of s 60 of the CAT Act which provides that, in the absence of "special circumstances", costs cannot be awarded.
Section 60(1) of the CAT Act provides that each party to proceedings in the Tribunal pay the party's 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 award of costs".
Section 60(3) of the CAT Act identifies a number of factors to which the Tribunal may have regard when determining whether special circumstances have been demonstrated.
The Applicant submitted (45) with respect to the provisions of s 60(3) that special circumstances were established in that the Respondent:
"(a) conducted the proceedings in a way that unnecessarily disadvantaged the Applicant;
(b) has been responsible for prolonging unreasonably the time taken to complete the proceedings;
(c) has provided no credible explanation as to why he failed to comply with the Summons adequately;
(d) there was no complex legal issues involved in the obligations to comply with the summons - it was a simple case of wilful, persistent and contemptuous attitude towards a summons issued by this Tribunal on the part of Mr Shang;
(e) it was a simple case of wilful, persistent and contemptuous attitude towards a summons issued by this Tribunal on the part of Mr Shang;
(f) it was a clear case of Mr Shang failing to comply with the duty imposed by s 36(3) which requires a party "to comply with the directions and orders of the Tribunal" in order to achieve the "just, quick and cheap resolution of the real issues in the proceedings". Mr Shang's conduct prolonged the proceedings."
[4]
Special circumstances
Both parties accept that, to enliven the discretion to award costs, a party seeking costs must establish "special circumstances" pursuant to s 60(2) of the CAT Act.
Section 60(3) of the CAT Act identifies seven matters to which the Tribunal may have regard in determining whether there are special circumstances warranting an award of costs. The Tribunal may also have regard to any other matter which it considers relevant to that determination (s 60(3)(g)).
Ordinarily, costs applications are made after proceedings have been determined on the merits, and are informed by the findings made in the course of that determination, and the outcome of the proceedings. The referral application not having been determined after a hearing, the submissions which either party can successfully advance with respect to s 60(3) factors are necessarily limited.
Special circumstances are circumstances that are "out of the ordinary", and do not have to be extraordinary or exceptional (Kadsielski v Guca 1 Pty Limited [2018] NSWCATAP 223). Each case turns on its own particular facts (Gizah Pty Limited v AXA Trustees Limited (No 2) [2001] NSWADT 164) and depends on the circumstances of the individual case (Brunsprop Pty Limited v Joanne Hay & Wes Davies [2015] NSWCATAP 152). The discretion to award costs must be exercised judicially and having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs (eMove Pty Limited v Naomi Dickinson [2015] NSWCATAP 94).
The rationale of awarding costs is to partially reimburse a successful party for costs incurred. A costs order is not intended to punish the unsuccessful party, but rather to compensate the successful party for costs incurred (Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534).
[5]
The nature of a summons in the Tribunal
Section 48 of the CAT Act provides for the "issue of summons". Section 48(3) of the CAT Act provides that a summons may require the person to whom it is addressed:
"(a) to attend and give evidence, or
(b) to attend and produce documents or things, or both."
Rule 34(6) of the Civil and Administrative Tribunal Rules 2014 (the Rules) refers to a "person who is summoned to attend and produce a document or thing" to the Tribunal.
Rule 33(1) of the Uniform Procedure Rules 2005 (NSW) (UCPR) provides that the court may "by subpoena order the addressee" to do the things referred to in s 48 of the CAT Act. Whereas a subpoena issued pursuant to Rule 33.2 of the UCPR is an order to the addressee to do something, a summons issued pursuant to s 48 of the CAT Act requires the addressee to do something.
Rule 33.12(1) of the UCPR provides that the "failure to comply with a subpoena without lawful excuse is a contempt of court and may be dealt with accordingly". Neither s 48 of the CAT Act, or Rule 34 of the Rules provides that the failure to comply with a summons is a contempt of the Tribunal.
Section 73(2) of the CAT Act provides that a person is "guilty of contempt of the Tribunal if the person does or omits to do anything that, if the Tribunal were a court of law having power to commit for contempt, would be contempt of the court unless the person establishes that there was a reasonable excuse for the act or omission". Section 73(5) of the CAT Act empowers the Tribunal to refer a matter to the Supreme Court if it "is alleged, or appears to the Tribunal on its own view, that a person is guilty of contempt of the Tribunal".
The submissions of both parties assume that the Tribunal has jurisdiction to entertain the referral application. Without expressing, or needing to express a concluded view, and acknowledging that the issue is less than straightforward, the provisions of s 73(2) of the CAT Act appear to render a referral application in reliance upon the failure to comply with a summons capable of being referred to the Supreme Court pursuant to s 73(5) of the CAT Act.
Notwithstanding the differences between a subpoena issued by a court, and a summons issued by the Tribunal, the authorities with respect to the consequences of failing to comply with a subpoena are considered to be instructive for the purposes of a referral application.
[6]
Costs of settled proceedings
As is not in doubt, the referral application has never been determined on its merits. The Tribunal is thus unable to make findings with respect to the disputed issues of fact identified above. The general principle applied by courts in relation to costs where proceedings are determined without a hearing on the merits, and where it cannot be said that one party has simply capitulated, is that there will be no order as to costs, with the intent that each party bear its own costs, unless it can be seen that one party has acted unreasonably in bringing or defending the proceedings (Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622).
In very rare cases it may be appropriate to make an order for costs without a contested hearing on the merits, if the Court can be almost certain that one party or the other would have "won" (Ferguson v Hyndman [2006] NSWSC 538; Newcastle Wallsend Coal Co Pty Limited v Industrial Relations Commission (NSW) [2006] NSWCA 129; Muhibbah Engineering (M) BHD v Trust Company Limited [2009] NSWCA 205), or the merits of the claim have in practical terms been determined in favour of the party seeking costs (Luxottica Retail Australia Pty Limited v Grant [2009] NSWCA 378).
In Australian Securities Commission v Aust-Home Investments Limited [1993] FCA 585; (1993) 44 FCR 194 Hill J observed, at [201] that:
"It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a Court determining how the costs 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" and which would "particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue"
In Lake Burrendong State Park Trust v Thompson [2011] NSWSC 1554, at [69]-[82], Hallen AsJ (as Hallen J then was) extensively reviewed the authorities with respect to the costs of settled proceedings. His Honour concluded, at [83]:
"Thus, it seems to me, if it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled, or its further prosecution became futile, the proper exercise of the costs discretion will usually mean the Court will make no order as to costs of the proceedings.
[7]
Consideration
The principles with respect to costs of settled proceedings emerging from the authorities are instructive for present purposes, particularly given the requirement of s 60(2) of the CAT Act that a party establish "special circumstances" in order to obtain an award of costs, and that the matters to which regard may be had pursuant to s 60(3) of the Act for the purpose of that determination are based on facts which are agreed or which have been found at a hearing.
The evidence before the Tribunal does not establish that either party simply capitulated. The evidence does not enable the Tribunal to conclude that either party would have "won" if the referral application had been heard and determined. Nor can the Tribunal find that the merits of either party's claim has been determined in its or his favour in practical terms.
In the present circumstances, the Tribunal is unable to find on the balance of probabilities that the Applicant acted unreasonably in commencing the referral application, or that the Respondent acted unreasonably in defending it.
The legal principles governing the referral application were concisely reiterated in DVI v ZIT [2021] NSWCATEN 4, at [5]-[12]. It is sufficient for present purposes to record that the Tribunal is unable to make findings with respect to any of the matters of relevance in a referral application identified in DVI. In circumstances where the Applicant asserts that the Respondent has still not fully complied with the summons, and the Respondent asserts that he has, in the absence of a hearing, the Tribunal cannot make findings on the balance of probabilities with respect to either party's allegations. Nor is it able to make any findings or draw any inferences as to the likelihood that the Applicant could have established the matters which it needed to in order to succeed with the referral application had it been heard and determined.
Essentially for the reasons recorded above, the Tribunal is unable to make findings supporting either party's claim with respect to any of the matters articulated in s 60(3)(a) to (f) of the CAT Act. There is no other matter which the Tribunal considers relevant to the determination of the present claims.
In the circumstances recorded above, the Tribunal is unable to make findings with respect to the Applicant's commencement and prosecution of the referral application, or the Respondent's defence of it, which takes the proceedings "out of the ordinary". Determinative in that respect is the inability of the Tribunal to make findings of fact with respect to the service of the summons on the Respondent, and the adequacy or otherwise of the Respondent's production of documents in response to the summons when it was served on him.
[8]
Disposition
Neither party having demonstrated special circumstances, each party's application will be dismissed.
[9]
Orders
1. That pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 the Tribunal dispenses with a hearing of the competing costs applications.
2. The application for costs of the Applicant is dismissed.
3. The application for costs of the Respondent 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: 19 August 2022
Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 the Tribunal dispenses with a hearing of the competing costs applications. The application for costs of the Applicant is dismissed. The application for costs of the Respondent is dismissed.
The Applicant ultimately submitted (46) that the Respondent has:
"failed to purge his contumacious, delinquent attitude and conduct towards a summons issued by the Tribunal to the very day of these submissions in that it has still not complied with the summons adequately by producing the balance of the documents and should be ordered to pay costs occasioned by his failure under s 60 in that he unnecessarily disadvantaged the Applicant, was responsible for substantially prolonging the proceedings, provided no satisfactory explanation, and failed to comply with the duty imposed on him under s 36(3)."
The Respondent submitted (20) that, on 23 March 2022 his solicitors informed the Applicant's solicitors that "they had served the wrong address and email address" and requested the withdrawal of the contempt application.
The Respondent submitted (31) with respect to s 60 of the CAT Act that, after a series of attempts to serve the Respondent with the summons, which were unsuccessful by reason of service being directed to the wrong address or addresses:
"It was only at a later stage that the applicant then took reasonable steps including conducting an ASIC search, personal service of the documents to the said address of the ASIC search and sending the documents to an email address actually associated with Mr Shang. However instead of using this information to bring the summons to Mr Shang's attention, they instead used this information to bring a contempt application to his attention. It would have saved both parties and Court's resources if the Applicant were to have served the summons upon him again before bringing the contempt application."
It was further submitted (32) that on 24 March 2022 the Applicant "failed to withdraw their application for contempt despite being provided with an explanation by Mr Shang's solicitors on 23 March 2022 regarding service on the wrong email address and residential address". The Respondent further submitted (33) that on 1 April 2022 "the Applicant failed to withdraw their application for contempt despite the [sic] Mr Shang having produced documents in compliance with the summons".
The Respondent submitted, in reliance upon the decision in Attorney General v Wentworth [1988] 14 NSWLR 481 that the referral application was vexatious in the circumstances asserted by him. It was further submitted (38) that the Applicant had "conducted the proceedings in a way which caused delay, unfairness to Mr Shang and caused him to incur legal costs." The Respondent submitted (39) that the Tribunal "should use its discretion to take into consideration Mr Shang's role in these proceedings", it being submitted that "Mr Shang's diligent behaviour in compliance with the Tribunal is certainly a factor the Tribunal to take into consideration".
It was further submitted (40) that the Respondent's response to the contempt application and the summons were "swift once he had been notified" and that (41) the "behaviour exhibited in his emails is inconsistent with somebody who would wilfully committing [sic] contempt against the Tribunal". The Respondent reiterated his assertion (44) that he had been "compliant with the summons at all material times".
Prior to the advent of the UCPR, refusal to obey a subpoena has been held to be a contempt of court (James v Cowan [1929] 42 CLR 305). The destruction of a relevant document before a subpoena has been issued can amount to contempt of court (Registrar of the Supreme Court, Equity Division v McPherson [1981] 1 NSWLR 688). Non-compliance with a subpoena to testify can found a contempt which is categorised as a contempt other than in the face or hearing of the court (Registrar of Court of Appeal v Maniam (No 1) (1991) 25 NSWLR 459).
Before a witness can be dealt with for contempt for failing to produce a document on subpoena, there must be evidence both that the document exists, or did exist, and that it was in the possession of the witness (O'Born v Commission for Government Transport [1959] 77 WN (NSW) 81). The minimum necessary for a contempt conviction constituted by disobedience to a court order, is wilfulness in the failure to comply, it is not sufficient merely to evidence a failure to fully comply with the terms of a subpoena (Markisic v Keelty [2005] NSWSC 1124).
An order for costs may be made in a case which has resolved without a hearing on the merits if it can be shown that a party has behaved unreasonably, or unreasonably pursued or defended litigation where that is found by reference to known or agreed circumstances, but, if the issue cannot be determined without reviewing large swathes of evidence and resolving on a tentative basis disputed questions of fact, the task should not be undertaken (Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84).