By a decision published on 23 February 2022 the Appeal Panel dismissed an appeal by Rita James against a decision of the Tribunal holding that she had not been discriminated against or victimised by the respondent, contrary to the Anti-Discrimination Act 1977 (NSW), in making certain decisions concerning her employment (James v Department of Justice (Corrective Services NSW) [2022] NSWCATAP 49). In that decision, orders were made permitting the respondent to file written submissions in respect of costs and the appellant to respond. The respondent filed submissions on 9 March 2022 seeking an order that the appellant pay its costs of the appeal. The appellant did not file submissions in response.
The orders made on 23 February 2022 required the submissions filed by the parties to address the question whether the application for costs could be dealt with on the papers and without a further hearing. The respondent's submissions submitted that the application could be dealt with on the papers without a further hearing. We are satisfied that that is the case and will make an order pursuant to section 50 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) dispensing with a hearing.
Section 60 of the NCAT Act provides:
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.
The respondent submitted that there were special circumstances warranting an award of costs in its favour. The respondent relied upon subparagraphs (b), (c), (e) and (g) of subsection 60(3).
The respondent also sought that costs be assessed on the indemnity basis, calculated by reference to 90% of the actual costs incurred by or on behalf of the respondent.
In Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 Santow JA (with whom Mason P and Brownie AJA agreed) stated, at [60], in relation to the question whether special circumstances existed:
For this purpose, it suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional. While a finding of "serious unfairness" is not prerequisite to determining that there are special circumstances, it is nonetheless a highly relevant consideration.
That statement was cited by the Appeal Panel in Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11] and in numerous subsequent decisions.
[2]
Section 60 (3) (b) - a party has been responsible for prolonging unreasonably the time taken to complete proceedings
The respondent submitted that "special circumstances arise due to the appellant's wholly unsuccessful appeal application which put the respondent to further unnecessary expense and unreasonably prolonged the time taken to complete the proceedings."
We do not accept that the appellant unreasonably prolonged the time taken to complete the appeal proceedings. We accept that the appellant filed substantial written material of doubtful relevance to the appeal, including evidence which had not been before the Tribunal at first instance, however we are not persuaded that the filing of that material "unreasonably" prolonged the proceedings.
In other respects, the respondent's submissions conflate the appeal proceedings with the first instance proceedings. The lodgement of the appeal did not prolong unreasonably the time taken to complete the appeal proceedings. It is the appeal proceedings with which we are concerned, not the proceedings at first instance. We consider the circumstances of this appeal distinguishable from the circumstances present in Wilson v Chan & Naylor Parramatta Pty Ltd [2018] NSWCATP 311 which the respondent relied upon. The issues arising in that case related to questions of jurisdiction to determine a broader dispute. That is not the position we are presently concerned with.
[3]
Section 60 (3) (c) - relative 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
The respondent submitted that "the appeal application demonstrates the appellant's continued failure to accept the relative strengths of her claims and the requirements of the ADA." The respondent submitted:
"31 In circumstances where the appellant was unable to properly challenge the primary factual finding that formed the basis of her entire appeal application, it is clear that the appeal had no tenable basis in fact or in law.
32 The respondent submits that special circumstances arise justifying an order for costs because both the substantive decision and the appeal decision leave little doubt as to the strength of the parties' respective positions."
The respondent submitted that the weakness of the appellant's case was borne out by paragraph [52] of the appeal decision where the Appeal Panel stated:
52 With respect to the Appellant, at their highest, her complaints establish that the Tribunal at first instance may have reached a different decision. As the authorities have consistently accepted, that cannot enliven appellate intervention. An appellant needs to demonstrate error of the kind identified in the authorities to which we have referred.
The respondent's submissions in this regard amounted, ultimately, to no more than the proposition that, the appeal having failed, it was thereby shown to have no tenable basis.
Section 60 (3) (c) requires more than this. As the appeal panel held in DYH v Public Guardian (No 3) [2022] NSWCATAP 34 at [17] - [19]:
17 The power to award costs in s 60 of the NCAT Act is to be understood in the context of the Act as a whole. One of the objects of the NCAT Act is "to ensure that the Tribunal is accessible and responsive to the needs of all of its users" (NCAT Act, s 3). A large proportion of its users are not legally trained and the general rule (which is modified for the Administrative and Equal Opportunity Division) is that a party has the carriage of the party's own case and is not entitled to be represented by any person, unless the Tribunal grants leave (NCAT Act, s 45(1); Sch 3, cl 9). The Tribunal is also obliged to ensure that the parties understand the nature of the proceedings and, if requested to do so, explain procedural matters to the parties (NCAT Act, s 38(5)).
18 The general rule set out in s 60(1) of the NCAT Act, that each party pay the party's own costs, was "designed to promote access to justice generally and to minimise the overall level of costs in tribunal proceedings as far as is practicable" (Choi v University of Technology Sydney [2020] NSWCATAP 18 at [41], citing Stonnington City Council v Blue Emporium Pty Ltd [2004] VCAT 1441 at [13]). The concern with access to justice, evinced in s 60(1), indicates that the Tribunal should not award costs too readily on the basis that one party's claim was stronger than the other party's claim (see NCAT Act, s 60(3)(c)). The relative strengths of the parties' claims is one factor to be taken into account, but a finding that a party's claim is weak does not necessarily mean that there are special circumstances warranting an award of costs (see Choi v University of Technology Sydney [2020] NSWCATAP 18 at [45]).
19 In this context, we consider that the power to award costs is to be exercised with some tolerance for self-represented litigants who do not understand legal concepts. That includes a lack of understanding of the rules governing the admission of fresh evidence and the question of what constitutes error for the purposes of an appeal. That approach is consistent with the principle that the discretion to award costs is to be exercised judicially "having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs" (Feng v OzWood (Australia) Pty Ltd [2020] NSWCATAP 42 at [8]).
We are not persuaded either that the appellant made a claim which had no tenable basis in fact or law or that the relative strengths of the claims made by the parties constituted special circumstances warranting an order for costs.
[4]
Section 60 (3) (e) - whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance
In support of its submission that the proceedings were frivolous, vexatious, misconceived and lacking in substance, the respondent repeated its submissions in respect of the relative strengths of the parties' claims.
The respondent also submitted that the appeal decision made it clear that the grounds of appeal were lacking in substance, citing paragraph [22] of the appeal decision, in which the Appeal Panel observed that the appeal grounds lacked specificity and that: "Inaccuracies and inconsistencies in the findings of the Tribunal, and the failure to take evidence into account, are alleged without any indication of the substance of the relevant complaints."
The respondent noted that none of the grounds of appeal raised a question of law and the appellant required leave to raise those grounds.
The respondent relied upon its reply to the appeal as clear notice to the appellant that the appeal could not succeed, as the necessary conditions for the grant of leave to appeal were not present.
The respondent submitted:
"46 The appellant failed to properly grapple with the required task of demonstrating that the Tribunal below erred in making its findings. It is clear that there was no error by the Tribunal below and as such, the appellant's claim was frivolous, vexatious, misconceived and lacking in substance. This should properly support a finding that special circumstances arise warranting an order for costs."
The respondent further submitted that the main ground of the appellant's challenge to the first instance decision effectively involved a fresh determination of the merits of the matter.
The respondent submitted "the appellant appears to have misunderstood her task, misunderstood the task of the Tribunal below, and misunderstood the task of the Appeal Panel in respect of her appeal application." The respondent submitted that the appellant included grounds of appeal that "could not reasonably be made and which were put without any proper basis" and that the appellant thereby made the proceedings much longer.
The respondent further specifically referred to the allegation by the appellant that the respondent had breached its model litigant obligations. The respondent referred to paragraphs [36] to [38] and [42] of the appeal decision and submitted that the claim that the respondent acted contrary to its model litigant obligations and that the appellant was not afforded procedural fairness was wholly without merit. The respondent submitted that this aspect of the appeal was frivolous, vexatious, misconceived and lacking in substance.
In Zucker v Burbank Montague Pty Ltd [2018] NSWCATAP 135 at [44] the Appeal Panel held that:
44 A finding that a claim is "not proved on the balance of probabilities" is not the same as a finding that a claim is "not tenable in fact or law". They are different concepts. The expression "no tenable basis in fact or law" relates to the common law tests developed and applied in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 and General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125. For a claim to have no tenable basis in fact or law it must be so obviously untenable that it cannot possibly succeed: General Steel at 130. "Manifestly groundless" or "clearly untenable" are equivalent expressions. In our view, for the purpose of s 60(3)(c), it matters not whether a conclusion that a claim has no tenable basis in fact or law is reached in connection with an application for summary dismissal or after a full hearing on the merits.
In that case, at [50], the Appeal Panel adopted the statement of Ipp JA in The Owners Corporation of Strata Plan 4521 v Zouk & Anor [2007] NSWCA 231 at [45] that "lacking in substance" means "'not reasonably arguable'. That is, a meaning not dissimilar to 'frivolous, vexatious, misconceived'".
We do not consider that the appeal could properly be described as frivolous, vexatious, misconceived or lacking in substance in the sense outlined by the Appeal Panel in Zucker v Burbank Montague Pty Ltd. The grounds of appeal were not established, and it may fairly be said that the appeal had weak prospects of success. However, as the Appeal Panel stated in DYH v Public Guardian (No 3) [2022] NSWCATAP 34, at [18], the concern with access to justice evinced in s 60 (1) indicates that the Tribunal should not award costs too readily on the basis that one party's claim was stronger than the other party's claim, and a finding that a party's claim is weak does not necessarily mean that there are special circumstances warranting an award of costs.
[5]
Section 60 (3) (g) - any other matter that the tribunal considers relevant
In respect of this paragraph, the respondent submitted that the costs order against the appellant "should not be denied, or minimised, on the basis that she is a self represented litigant". The respondent noted, citing Choi v University of Technology Sydney [2018] NSWCATAD 7 at [37], that a party's entitlement to apply for costs does not depend upon the other party's legal knowledge.
As the Appeal Panel stated in DHY v Public Guardian (No 3) at [19]: "the power to award costs is to be exercised with some tolerance for self-represented litigants who do not understand legal concepts." The fact that the applicant was not represented was not irrelevant to the consideration whether there were special circumstances.
The respondent's submission does not otherwise raise any further matter which might be relevant to the question whether there are special circumstances warranting an order for costs.
The respondent raised two other matters relating to the history of the proceedings, which it submitted were relevant to the consideration whether they were special circumstances.
1. The first matter was what the respondent described as "the appellant's continued failure to obtain legal advice as repeatedly recommended by the respondent"
2. The second matter was "the history of the appellant being unwilling or unable to accept reasonable decisions."
The respondent finally submitted:
"60 In the respondent's submission, the appellant continues to use the Tribunal to air her grievances without any regard to whether there is a proper legal basis to do so. This is unquestionably a special circumstance warranting departure from the ordinary principle that each party bear their own costs."
We do not consider that the appellant's apparent or alleged failure to obtain legal advice could constitute a special circumstance warranting an order for costs. The evidence before the Appeal Panel does not disclose whether the appellant was able to obtain legal advice or was unable to do so, whether for financial reasons or otherwise. Legal representation should not be essential in the Tribunal and, in general, the failure of a party to obtain legal representation or advice should not be held against it. The position might be different in circumstances where there is reason to conclude that a party elected not to obtain legal representation because they understood that a legal practitioner, bound by ethical obligations to the Tribunal and otherwise, could not maintain the case they wished to pursue. There is no evidence before the Appeal Panel to suggest that the appellant's apparent failure to obtain legal advice was a deliberate strategem.
In support of its submission that the appellant had a history of being unable or unwilling to accept reasonable decisions, the respondent referred to a letter, "without prejudice save as to costs" sent to the appellant on 4 August 2021. That letter contains the assertion that the appellant was unwilling or unable to accept reasonable decisions. The content of the letter does not rise above that bald assertion.
It must be noted that the appellant was successful in her first claim of unlawful discrimination brought against the respondent.
The respondent did not rely upon the offer of settlement set out in the letter of 4 August 2021 as itself constituting special circumstances warranting an award of costs. It is clear that the letter could not be treated as an appropriate offer for the purposes of assessing the question of costs. The letter offered a payment of compensation "to be taxed as general damages" provided the appellant discontinued proceedings, including the appeal, against the respondent, and resigned from employment with the respondent.
The termination of the appellant's employment was never a potential outcome of the appeal. In no circumstances could an outcome have been achieved by the respondent which could be said to have been a better outcome for the respondent than the offer contained in the letter. Under no circumstances could it be said that the appellant acted unreasonably in rejecting the offer.
We have considered above, separately, each of the matters relied upon by the respondent as constituting special circumstances warranting an order for costs. We have held that none of those matters, individually, constitute such special circumstances. We are also of the view that, even when all matters are taken together, there are not special circumstances warranting an order for costs in relation to the appeal.
Our orders are:
1. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW) a hearing on the question of costs is dispensed with.
2. The respondent's application for costs 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
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Decision last updated: 30 June 2022