Houda v Seraphim (Costs)

Gelder v The Owners - Strata Plan No 38308 [2021] NSWCATAP 109

General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125; [1964] HCA 69

Houda v Seraphim [2025] NSWCATAP 135

James v Department of Justice (Corrective Services NSW) (No 2) [2022] NSWCATAP 216

Kaye v The Owners - Strata Plan No 4350 [2022] NSWSC 1386

Lisle v Courtney [2025] NSWCATAP 121

Misrachi v Public Guardian [2019] NSWCA 67

Monday (a pseudonym) v R [2022] ACTCA 25

MRWL v Australian Securities Investment Commission [2022] AATA 3366

Seraphim v Houda [2024] NSWCATAD 341

Smith v Smith [2006] UKHL 35; [2006] 1 WLR 2024

Youssef v NSW Legal Services Commissioner (Costs) [2020] NSWCATOD 115

P Herzfeld and T Prince, Interpretation (2nd ed, 2020, Thompson Reuters)

Civil and Administrative Tribunal of New South Wales

[2024] NSWCATAD 341

1. In a recent decision we refused to give Mr Adam Houda and the law firm of which he is the principal, Lawyers Corp Pty Ltd, leave to appeal from a decision made by the Administrative and Equal Opportunity Division of the NSW Civil and Administrative Tribunal (NCAT): Houda v Seraphim [2025] NSWCATAP 135 (the Appeal Decision (AD)). Ms Hana Seraphim, the respondent in the appeal and the applicant in the substantive proceedings, seeks an order for the costs of that appeal (the costs application). These reasons address that application, which is opposed by Mr Houda and Lawyers Corp.
2. In the decision the subject of the appeal, the Tribunal refused an application made by Mr Houda and Lawyers Corp seeking orders that the names of parties and witnesses not be disclosed, that certain evidence not be published and that the proceedings be conducted wholly in private (the Confidentiality Application): Seraphim v Houda [2024] NSWCATAD 341. The substantive proceedings concern a complaint made by Ms Seraphim under the Anti-Discrimination Act 1977 (NSW) alleging that she was sexually harassed, and later victimised, by Mr Houda during a placement with Lawyers Corp. The Tribunal is yet to determine the merits of that complaint.
3. For convenience in these reasons, we will refer to the appellants in the appeal and the respondents in the substantive proceedings, Mr Houda and Lawyers Corp as "Mr Houda".
4. We decided to determine the costs application "on the papers", that is, without a hearing, because we are satisfied that the issues it raises for determination can be adequately determined by considering the parties' written submissions: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 50(2). Neither party opposed that course.
5. For the reasons that follow, we have decided not to exercise the discretion to make an order for costs in favour of Ms Seraphim.

1. Section 60(1) of the NCAT Act creates the general rule that each party is to pay their own costs. Section 60(2) gives the Appeal Panel a discretionary power to award costs but only if it is "satisfied that there are special circumstances warranting an award of costs". Section 60(3) sets out a non-exhaustive list of factors the Appeal Panel may have regard to in deciding whether there are special circumstances warranting an award of costs.
2. Section 60 states:

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.

1. In Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81, the NSW Court of Appeal considered the meaning of the term "special circumstances" in s 88(1) of the now repealed Administrative Decisions Tribunal Act 1997 (NSW) (ADT Act). While in different terms to s 60 of the NCAT Act, like that provision, s 88(1) of the ADT Act gave the Tribunal power to award costs "but only if it is satisfied that there are special circumstances warranting an award of costs". At [60], Santow JA held (Mason P and Brownie AJA agreeing) that the Tribunal was in error in failing to conclude that special circumstances were established. Santow JA observed: "[I]t suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional". NCAT has consistently applied that statement: see eg Gelder v The Owners - Strata Plan No 38308 [2021] NSWCATAP 109 at [12]; Youssef v NSW Legal Services Commissioner (Costs) [2020] NSWCATOD 115 at [107]; James v Department of Justice (Corrective Services NSW) (No 2) [2022] NSWCATAP 216 at [6].
2. More recently, in Kaye v The Owners - Strata Plan No 4350 [2022] NSWSC 1386 at [70], Basten AJA said that the term "special circumstances" in s 60 of the NCAT Act is "not a term of art":

"[70] ...Its scope and operation will depend heavily on the context in which it appears. A particular circumstance which appears to be special in one case may not be so in another. It is not a phrase which readily gives rise to appellate explication."

1. Where special circumstances are found to exist, the Tribunal has a discretion to exercise in deciding what, if any, order should be made: Lisle v Courtney [2025] NSWCATAP 121 (Lisle) at [34]. 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: Lisle at [35]; eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48]. Relevant to the exercise of that discretion are those facts upon which the finding of special circumstances was based.

1. Ms Seraphim contends that the following factors constitute special circumstances warranting an award of costs:

(1) the appeal had "no tenable basis/or matter of substance" (NCAT Act, ss 60(3)(c), 60(3)(e));

(2) Mr Houda's conduct in the appeal "unreasonably prolonged the proceedings, contributed to their complexity and has been inconsistent with the duty imposed to facilitate the just, quick and cheap resolution of the matter" (NCAT Act, ss 60(3)(b), 60(3)(d), 60(3)(f)). In support of that contention Ms Seraphim points to:

(a) Mr Houda's failure to appear at the appeal call over on 13 December 2024;

(b) Mr Houda's "late and unreasonable response to [Ms Seraphim's] email seeking to discuss the agreed Appeal bundle";

(c) Mr Houda's "advancement of contradictory and varying arguments in support of [his] numerous attempts to close or suppress the hearing"; and

(d) Mr Houda's reliance on a multitude of cases which provided no support for his arguments.

1. Mr Houda argues that Ms Seraphim has failed to demonstrate special circumstances. He argues that, in any event, the items claimed by Ms Seraphim in the costs application are neither "costs" within the meaning of s 60 of the NCAT Act_,_ nor costs for which Ms Seraphim is liable for, or have been reasonably incurred.

Should the determination of the cost application be deferred?

1. Mr Houda argues that in circumstances where the complaint the subject of the substantive proceedings is yet to be determined, it would be premature to determine the costs application.
2. We disagree. The decision under appeal concerned a discrete issue: the interpretation and application of the provisions in the NCAT Act which permit the Tribunal to make orders to conduct a hearing in private, and to prohibit the publication of evidence and the names of parties. That decision will have no bearing on the factual and legal issues raised by the substantive application, broadly, whether in contravention of the Anti-Discrimination Act Mr Houda sexually harassed Ms Seraphim.

Appeal had no tenable basis and was lacking in substance

1. Ms Seraphim contends that the appeal had no tenable basis and was lacking in substance: NCAT Act, ss 60(3)(c), 60(3)(e). She argues that Mr Houda relied on an "artificially narrow" interpretation of the word "desirable" contained in

ss 49(2) and 64(1) of the NCAT Act. This, she asserts, was contrary to any "sound legal conceivability and well-established principles on the open administration of justice". 2. In addition, Ms Seraphim contends that in prosecuting the appeal despite being represented by Counsel, a team of solicitors and being, himself, an experienced solicitor, Mr Houda advanced arguments which were not put in the proceedings below. 3. Mr Houda disagrees and contends that the mere fact that leave to appeal was refused does not mean that the appeal had no tenable basis and lacked substance. He contends that it is significant that both parties made extensive written and oral submissions in the appeal and before delivering a lengthy and considered decision, the Appeal Panel was reserved for some months.

1. In his application for leave to appeal from the Tribunal's decision, Mr Houda relied on two primary grounds:

(1) that the Tribunal misapplied ss 49 and 64 of the NCAT Act, by, among other things misconstruing the word "desirable";

(2) that the Tribunal failed to give proper (or sufficient) regard to the interests of affected third parties in determining whether to make orders under ss 49 and 64 of the NCAT Act.

1. In respect of each ground, we concluded that there was no demonstrable error on the part of the Tribunal and declined to grant Mr Houda leave to appeal: AD at [107], [128].
2. Ground 1 raised a question of statutory construction. Such questions are seldom straightforward. They require consideration of the text, context and purpose of the impugned statutory provision. A "judicial utopia" where statutes are "expressed with such clarity and would cover every contingency so effectively that interpretation would be straightforward and the only task of the courts would be to apply their terms" is yet to arrive: see Lord Carswell in Smith v Smith [2006] UKHL 35; [2006] 1 WLR 2024 at [79], quoted in P Herzfeld and T Prince, Interpretation (2nd ed, 2020, Thompson Reuters) at [1.10].
3. With respect to Ground 1, which was the focus of the appeal, we concluded that Mr Houda's challenge to the Tribunal's interpretation and application of the challenged provisions of the NCAT Act, was not reasonably arguable. Some of the arguments he advanced in support of that ground fell perilously close to lacking in substance in the sense of being "manifestly groundless" or "so obviously untenable" that they "cannot possibly succeed": see Barwick CJ in General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125; [1964] HCA 69 at [129]- [130]. However, assessed overall, those arguments did not cross that line.
4. Likewise, concerning Ground 2, we rejected Mr Houda's contention that the Tribunal failed "to give proper (or sufficient) regard to the interests of affected third parties". In the appeal, Mr Houda identified Lawyers Corp's sole employed solicitor as one of the affected third parties whose interests the Tribunal purportedly failed to consider. In the proceedings before the Tribunal, Mr Houda referred to the employed solicitor but did not claim that their interests would be adversely affected if the Tribunal did not accede to the Confidentiality Application. Rather, his submission focussed on the damage to his own "professional standing", which he asserted would in turn have a "damaging effect on his (and hence his firm's) ability to generate work and income": AD at [118]. Mr Houda led no evidence of any "harm" that might be occasioned to the employed solicitor if the Tribunal declined to make the confidentiality orders he sought: AD at [116], [118].
5. In rejecting the argument that the Tribunal failed to have proper regard to the interests of Lawyers Corp's employed solicitor, we found that the Tribunal dealt with this aspect of Mr Houda's case consistently with how it was presented to the Tribunal: AD at [116], [121].
6. As it was not argued in the proceedings below that the interests of Lawyers Corp's employed solicitor would be adversely affected if confidentiality orders were not made, Mr Houda's claim that the Tribunal failed to consider that argument was untenable. Mr Houda's conduct in making that claim in the appeal constitutes special circumstances for the purpose of s 60(3)(c) of the NCAT Act.

1. Ms Seraphim contends that Mr Houda's conduct constitutes special circumstances because it prolonged and contributed to the complexity of the appeal and amounted to a failure to comply with the duty imposed by s 36(3) of the NCAT Act to co-operate with the Tribunal to give effect to the guiding principle of the NCAT Act, to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

Ground 1: Failure to appear at the first call over hearing

1. The appeal was listed for a call over hearing on 13 December 2024. When no appearance was entered for Mr Houda, a differently constituted Appeal Panel (Principal Member Blake SC), dismissed the appeal under s 55(1)(c) of the NCAT Act. On 22 January 2025, after considering the explanation proffered by Mr Houda's solicitor for his non-attendance, the Appeal Panel exercised the discretionary power conferred by s 55(2) of the NCAT Act to reinstate the appeal. In addition, the Appeal Panel made orders by consent that there be "no order as to the costs of the Application for reinstatement lodged on 13 December 2024".
2. In support of the costs application, Ms Seraphim claimed that she had requested Mr Houda's solicitor to be made available for cross-examination at the reinstatement hearing on 22 January 2025. Mr Houda disputed that claim.
3. The relevance of those claims to the question of whether Mr Houda's failure to attend the first call over hearing constitutes special circumstances is not readily apparent given:

(1) Ms Seraphim does not claim costs for the reinstatement hearing; and

(2) the Appeal Panel made orders by consent that there be no order as to the costs of that hearing.

1. We are not satisfied that Mr Houda's failure to attend the first call over constitutes special circumstances warranting an award of costs.

Ground 2: The "late and unreasonable response to [Ms Seraphim's] email seeking to discuss the agreed Appeal bundle"

1. On 22 January 2025, the Appeal Panel listed the appeal for hearing and made a series of procedural orders including that by 7 February 2025 Mr Houda file and serve an "agreed bundle of documents to be relied on in the appeal, including the relevant documents that were before the Tribunal at first instance": Order 1.
2. In an email sent 27 January 2025, Ms Seraphim requested Mr Houda's solicitors:

(1) to include 14 nominated documents in the agreed bundle;

(2) to give her a list of any additional documents Mr Houda proposed to include in the agreed bundle; and

(3) before filing the agreed bundle of documents to give her a copy, "so I can confirm that I am agreeable to it being filed".

1. In an email in reply sent 7 February 2025, Mr Houda's solicitors said that they agreed to three of Ms Seraphim's nominated 14 documents being included in the agreed bundle but not the balance, reasoning that those documents had not before the Tribunal. The solicitors proposed that if Ms Seraphim maintained her position that she file any non-agreed material in a supplementary bundle. Ms Seraphim rejected that proposal. Over the following 24 hours the parties exchanged numerous emails asserting the reasonableness of their respective positions.
2. On 12 February 2025, following an application made by Mr Houda, the Appeal Panel vacated Order 1 made on 22 January 2025 and ordered Mr Houda to prepare and file a bundle of documents consisting of material it specified.

1. Ms Seraphim submits that Mr Houda's "late and unreasonable response" to her request to discuss the bundle of documents, required to be filed in answer to Order 1 made on 22 January 2025, constitutes "special circumstances". That submission is problematic for the following reasons.
2. First, it requires acceptance of the premise that Mr Houda's response to Ms Seraphim's request was unreasonable. The stated reason Mr Houda gave for not acceding to that request was that some of the documents Ms Seraphim requested be included in the agreed bundle had not been tendered in the proceedings before the Tribunal and therefore were irrelevant to the appeal. Mr Houda proposed that if Ms Seraphim maintained that those documents were relevant to the appeal it was open to her to file them in a separate bundle. On its face this response does not appear unreasonable.
3. Second, while Mr Houda's tardy response to Ms Seraphim's request is likely to have inconvenienced Ms Seraphim and interfered with her preparation of the appeal, it is not evident that it "prolonged unreasonably the time taken to complete" the appeal. As a result of the dispute between the parties about the composition of the agreed bundle, the Appeal Panel extended the time to comply with Order 1, but otherwise made no changes to the timetable it had set for the appeal. The appeal remained listed for hearing on 12 March 2025.
4. Third, Ms Seraphim has failed to explain the basis for her assertion that Mr Houda's tardy response to her request added to the complexity of the proceedings (s 60(3)(d)) or evidenced that he refused or failed to comply with the duty imposed by s 36(3) of the NCAT Act (s 60(3)(f)).
5. We are not satisfied that Mr Houda's late response to Ms Seraphim's request constitutes special circumstances for the purpose of ss 60(3)(b), 60(3)(d) or 60(3)(f) of the NCAT Act.

Ground 3: Mr Houda's "advancement of contradictory and varying argument in support of their numerous attempts to close or suppress the hearing"

1. In support of this contention, Ms Seraphim points to the argument advanced by Mr Houda in written submissions dated 22 April 2024, that an open hearing "could compromise the welfare and safety of our clients", which she contends was contradicted by the oral submission made by Mr Houda on 21 October 2024 that his "safety ... could be compromised from his clients if the hearing was kept open".
2. The argument to which Ms Seraphim refers were arguments made in the proceedings before the Tribunal, not the appeal. She has failed to explain how these "contradictory arguments" affected the time taken to conduct, or the complexity of, the appeal.

Ground 4: Mr Houda's reliance on a multitude of cases which provided no support for his argument

1. Ms Seraphim contends that "all or most" of authorities cited by Mr Houda did not support the arguments he advanced in the appeal, citing as examples_, DRJ v Commissioner of Victims Rights_ [2020] NSWCA 136; Misrachi v Public Guardian [2019] NSWCA 67; MRWL v Australian Securities Investment Commission [2022] AATA 3366; Monday (a pseudonym) v R [2022] ACTCA 25.
2. We found that several authorities cited by Mr Houda did not assist some of the arguments he sought to advance: AD at [105], [111], [112]. However, it overstates the position to contend "all or most" of the cited authorities could be so categorised. Likewise, it overstates the position to contend that by citing authorities which did not advance arguments he made in the appeal, Mr Houda unnecessarily prolonged or materially added to the complexity of the appeal.

1. To exercise the discretion to award costs under s 60 of the NCAT Act requires that we reach a state of satisfaction as to the existence of special circumstances. As discussed above, one of the arguments advanced by Mr Houda in the appeal was untenable because it was based on the mistaken premise that the Tribunal failed to have regard to an argument advanced by Mr Houda, that is, that the interests of his employed solicitor would be adversely affected if the confidentiality orders he sought were not made. It is not to Mr Houda's credit that he put that argument in the appeal. It was at best mistaken and at worst misleading.
2. Had that argument featured more prominently in the appeal or occupied a greater proportion of the time to hear the appeal, we would be inclined to the view that it may be appropriate to exercise the discretion to award costs to Ms Seraphim. However, it did not. We are not persuaded that Mr Houda's conduct in advancing that argument, warrants the exercise of the discretion to depart from the usual rule that parties are to bear their own costs.

(1) A hearing is dispensed with, under s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW).

(2) The application for costs on the appeal is refused.

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.