(3) However, the Tribunal may not award costs in relation to proceedings for an original decision unless the enactment under which the Tribunal has jurisdiction to make the decision provides for the awarding of costs.
(4) In this section, "costs" includes:
(a) costs of or incidental to proceedings in the Tribunal, and
(b) the costs of or incidental to the proceedings giving rise to the application, as well as the costs of or incidental to the application.
Issues
13 The questions which the Tribunal must ask itself are as follows:
a) Does the Tribunal have the power to order a witness to pay costs?
b) If so, are there special circumstances justifying an award of costs against the Delfinos?
c) If so, should costs be awarded on an indemnity basis?
Does the Tribunal have the power to order a witness to pay costs?
14 Applicant's submissions. The applicant submitted that the Tribunal has power to award costs against a witness because s 88 allows the Tribunal to "determine by whom and to what extent costs are to be paid." Similar provisions exist in s 76(1)(b) of the Supreme Court Act 1970, s 34(1)(b) of the Local Court (Civil Claims) Act 1970 and s 148B(1)(b) of the District Court Act 1973.
15 The applicant cited examples of cases where a court had ordered costs against a non-party and sought to compare the facts of those cases to the present case. In particular, in Naomi Marble & Granite Pty Ltd v FAI General Insurance Company Limited (No 2) 1999 1 QD R 518, the Supreme Court of Queensland ordered a witness, Mr Kenneth Pitts, to pay costs on an indemnity basis.
16 Delfinos' submissions. Mr Williams, the legal representative for Daniel and Rubens Delfino, submitted that witnesses have a well-established immunity from suit. (Dawkins v Lord Rokeby (1973) LR 8 QB 255 at 264; Cabassi v Vila 1940 64 CLR 130; Jovanovic & anor v Woods & anor [2001] TASSC 96 (15 August 2001). While Mr Williams conceded that a costs application is not a cause of action from which a witness would automatically have immunity, he argued that the same public policy considerations which apply to protecting witnesses from being sued in relation to the giving of evidence, should equally protect them from any order for costs. (Najjar v Haines & Ors (1991) 25 NSWLR 224.)
17 Tribunal's conclusion. In Kondos & Anor -v- Citadin Pty Limited (RLD) [2003] NSWADTAP 7, the Appeal Panel of this Tribunal decided that s 88(2)(b) of the ADT Act confers power to make orders for costs against non-parties including lay advocates. In that case the Retail Leases Division of the Tribunal ordered the professional representatives of the applicant in proceedings brought under the Retail Leases Act 1994 to pay the respondent's costs of the proceedings.(Ultraglen Pty Ltd v Citadin Pty Ltd [2002] NSWADT 220.) The Tribunal noted that the text of s 88(2)(b) is in the same terms as s 5 of the Supreme Court of Judicature Act 1890 (United Kingdom), which has been held to permit the making of costs orders against non-parties. The Appeal Panel, at [20] referred to the discussion in Aiden Shipping Ltd v Interbulk Ltd [1986] 1 AC 965 at 975 & ff (HL) per Lord Goff; approved Knight and Anor v FP Special Assets Ltd and Ors (1992) 174 CLR 178 (HCA), in dealing with similar provisions in the costs rules of the Queensland Supreme Court.
18 In Knight & Anor v FP Special Assets Limited & Ors (1992) 174 CLR 178, the High Court held that Order 91 rule 1 of the since repealed Rules of the Supreme Court of Queensland conferred jurisdiction to make an order for costs against the receivers of companies who were not themselves parties to those proceedings. At 192 Mason CJ and Deane J stated that ". . . the general principle is that an order for costs is only made against a party to the litigation." However there are a "a variety of circumstances in which considerations of justice may . . . support an order for costs against a non-party." At p.203 of Knight Dawson J said "... in general costs are not awarded against non-parties but that is because it is generally inappropriate to do so." He went on to say, "But I see nothing in the rule to prevent it being done in the exceptional case where it is appropriate to do so."
19 I am satisfied that the Tribunal has power to make a costs order against a non-party, including a witness, under s 88. The general immunity of a witness from being sued in relation to evidence that they have given in proceedings does not prevent an order for costs from being made against them in an appropriate case.
Are there special circumstances justifying an award of costs against the Delfinos?
20 In determining whether there are special circumstances justifying an award of costs, the Tribunal should be guided by decisions of superior courts. Although many courts and tribunals have power to order costs against a witness (depending on the terms of the legislation under which they operate) costs are rarely awarded, even in jurisdictions where costs follow the event. The test to be applied where costs follow the event, has been articulated recently by the Supreme Court of Queensland in Naomi Marble & Granite Pty Ltd v FAI General Insurance Company Limited and Ors Another 1999 1 QD R 518. Shepherdson J examined the relevant authorities including the High Court's decision in Knight's case and concluded that there is no limit on the court's jurisdiction to exercise its discretion to order costs against a non-party but such discretion should only be exercised in the "interests of justice."
21 At 544, Shepherdson J articulated the test to be applied:
I propose to apply the "interests of justice" test bearing in mind the circumstances of the case against each of the four non-parties against whom the defendants have sought indemnity costs orders. I also propose to proceed on the basis that if any costs order is to be made against any one of them I must be satisfied that the case is an exceptional one and such that the interests of justice justify departure from the prima facie general principle sufficient to warrant a costs order.
22 Shepherdson J, at 545, summarised the cases in which a non-party had been ordered to pay costs as follows:
· where a person has some management of the action e.g. a director of an insolvent company who causes the company improperly to prosecute or defend a proceeding;
·where a person has maintained or financed the action;
·where the unsuccessful party is a corporation (as is the case here) the director or directors who have the right to control the corporation;
·in the situation of a party to litigation who was an insolvent person or a man of straw, a person who has played an active part in the conduct of the litigation and who has an interest in the subject matter of the litigation;
·where the non-party is the effective litigant standing behind the actual party;
·where the non-party is funding or otherwise financially assisting the unsuccessful party to the litigation and stands to benefit if that party has been successful;
·where a non-party has supported the unsuccessful party and has done so acting in bad faith towards the other parties and towards the court such as by giving false testimony or forging documents or preventing relevant documents being discovered.
23 Shepherdson J found at 546, that a woman by the name of Anne Hunter was the managing partner for the plaintiff and as such had the right to control that company. His Honour concluded that:
On that basis alone she falls within a category of persons against whom, as a non-party, an order for costs may be made. . . . In addition as I found and as I have already indicated in these reasons she played a very active part in the conduct of the litigation being the major witness for the plaintiff and had an interest in the subject matter of the litigation . .
Furthermore, in supporting the unsuccessful litigation she did so in what I regard as complete bad faith towards the two defendants by giving false testimony. To succeed in its claims against each defendant the plaintiff depended entirely on her evidence. . .
She attempted to deceive the court and in my view, this is a clear-cut and exceptional case justifying departure from the prima facie general principle that costs orders are only made against a party to the litigation.
24 Shepherdson J also concluded at 554, that a witness, Kenneth Pitts, had partially financed the litigation, had a financial interest in the outcome of the case and had deliberately given false evidence to bolster the evidence of Ann Hunter, his fiancée and later his wife.
25 Mr Locaputo applied for a conveyancers licence. The respondent made a decision, no doubt based, in part, on the representations of the Delfinos, that the licence should not be given. Following internal review, Mr Locaputo applied to the Tribunal for a review of that decision. On the basis of all the evidence, the Tribunal set aside the respondent's decision. In doing so, the Tribunal rejected some of the evidence of the Delfinos and made findings inconsistent with that evidence. The Tribunal made no finding that either Rubens or Daniel Delfino had deliberately given false evidence or otherwise acted in bad faith.
26 The Delfinos did not manage, conduct or finance the action. They were not the "effective litigants" standing behind the respondent. They were merely witnesses in a case brought by Mr Locaputo against a decision of the Director General. While that decision was influenced by the representations of the Delfinos, I am satisfied that the respondent made the decision independently on the basis of all the relevant evidence.
27 The applicant submitted that the Delfinos had an interest in the subject matter of the litigation because if the applicant obtained a conveyancers licence he would set up business in competition with their firm. As both the Delfinos and Mr Locaputo speak Spanish they would be in direct competition with one another for Spanish speaking clients.
28 It is a relatively common occurrence that a witness will have some interest in the outcome of the litigation. Even if the Delfinos had an interest in the subject matter of the litigation, that is not an exceptional situation which, in the interests of justice, would justify departure from the prima facie general principle that costs orders should only be made against parties.
29 For these reasons, the present case does not fall within the test enunciated by Shepherdson J in Naomi Marble, nor does it fall within any of the categories of case which has previously justified an order for costs against a witness. Given that the test of "special circumstances" is more onerous than that which is applicable in jurisdictions where costs generally follow the event, the application for costs is refused.
30 Since the circumstances of this case do not justify an award of costs against the Delfinos, there is no need to consider whether costs should be awarded on an indemnity basis.
Costs of this application
31 The final matter to consider is whether an order for costs should be made in relation to this application. The applicant applied for costs against the Delfinos in relation to the present application as well as in relation to the substantive proceedings. The applicant has been unsuccessful and there are no special circumstances justifying an award of costs in the applicant's favour.
32 The Delfino's applied for costs, on an indemnity basis, in relation to the applicant's application for costs. The Delfinos submitted they have been forced to defend an application that they personally pay the costs of proceedings to which they are strangers. In their view, pursuant to s 88 of the ADT Act, this situation constitutes special circumstances.
33 In Kondos & Anor -v- Citadin Pty Limited [RLD] [2003] NSWADTAP 7 the Appeal Panel upheld a decision of the Tribunal awarding costs against a non-party. The Appeal Panel also ordered the appellants to pay the respondents' costs of the appeal.
34 In this case the applicant's application for costs have been unsuccessful. A separate question arises as to whether there are "special circumstances" justifying an award costs in relation to the costs application.
35 The Tribunal and the Appeal Panel has now dealt in a number of decisions with the question of what might constitute special circumstances justifying a costs order. (See, for example, Citadin Pty Ltd -v-Eddie Azzi Australia Pty Ltd & General Pants Co Pty Ltd (No 2) [2001] NSWADTAP 31; Graham -v- Director General, Department of Community Services [2001] NSWADTAP 4; Tu -v- University of Sydney (No 2) [2002] NSWADTAP 25; Harding -v- UNSW [2002] NSWADTAP 36 (EOD). In this case, although it is a rare event that an application is made for an award of costs against a non-party, the Delfinos did not point to any misconduct of the applicant in relation to the present application, any breach of procedural requirements or any other basis which may constitute "special circumstances" justifying an award of costs. It is true that the application has been dismissed but mere "success" is not sufficient to justify an award of costs. While there may be cases where an order for costs against an unsuccessful applicant for costs is justified, this is not one of them. In those circumstances I make no order as to costs in relation to this application.