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[2007] NSWADT 291
plaintiff. The Commissioner to pay Mr Nastav's legal costs, as assessed or agreed, from 28 July 2006.
No linked legislation citations have been extracted yet.
Mr Nastav lost his security licences after the Commissioner relied on secret criminal intelligence he was never shown. The Tribunal ruled that most of the intelligence could not be kept confidential. The police kept pressing ahead with similar secret material anyway. Only after further warnings about natural justice did they withdraw it and agree the revocation should be overturned. The Tribunal decided the police's refusal to accept the earlier ruling unnecessarily stretched the case out, so ordered them to pay Mr Nastav's legal costs from the date of that ruling.
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2,528 words · generated 24/04/2026
Stephen Nastav held a Class 1ABC, Class 2B and Master Security Licence issued under the Security Industry Act 1997. On grounds that he was no longer a fit and proper person and that it was not in the public interest for him to hold the licences (s.26(1)(c) and (d) of the SI Act and cl 18 of the Security Industry Regulation 1998), the Commissioner of Police revoked the licences. The Commissioner’s decision rested on criminal intelligence reports and other criminal information. He sought to place that material before the Tribunal on a confidential basis pursuant to s.15(7) of the SI Act without disclosure to Mr Nastav or his representatives.
Mr Nastav applied for external review on 13 April 2006. Deputy President Magistrate Hennessy stayed the revocation on 21 April 2006. A preliminary hearing on 10 May 2006 addressed the Commissioner’s application for confidentiality orders under s.75 of the Administrative Decisions Tribunal Act 1997. On 28 July 2006 the Tribunal (Higgins S) dismissed the confidentiality application in respect of the majority of the documents on the basis that it would deny procedural fairness contrary to s.73(2) of the ADT Act (Nastav v Commissioner of NSW Police [2006] NSWADT 215 at [33]). Confidential reasons were appended to that decision.
Notwithstanding the 28 July 2006 ruling, the Commissioner continued to rely on documents of a similar character and sought to supplement them with further criminal intelligence. Mr Nastav’s counsel, Mr Nguyen, relied on the recent decision in Habak v Commissioner of Police [2006] NSWADT 213, in which Hennessy DP held that s.15(7) could not be used to deny natural justice to an existing licence holder facing revocation. On 21 November 2006 the parties consented to the substantive application being determined on the papers including the additional confidential material.
At every directions hearing Mr Pisani, solicitor for the Commissioner, indicated that if confidentiality was refused the Commissioner would withdraw the material and consent to the revocation decision being set aside because no other evidence would remain. On 27 April 2007 the Tribunal relisted the matter. Higgins S informed the parties that the High Court’s reasoning in Veal v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72 applied and that denying Mr Nastav knowledge of the allegations would breach natural justice. The additional material was, in the Tribunal’s view, indistinguishable from that already ruled upon. After taking instructions, the Commissioner withdrew the material and consented to the revocation being set aside.
Mr Nastav was unrepresented at the final directions hearing but, through Mr Nguyen, made a written application for costs on 17 May 2007 (having foreshadowed such an application on 6 October 2006). No submissions were received from the Commissioner. The costs application was determined on the papers.
Higgins S began by recognising that the Tribunal has no inherent power to award costs; its jurisdiction is exhaustively stated in s.88 of the Administrative Decisions Tribunal Act 1997, which permits a costs order “only if it is satisfied that there are special circumstances warranting an award of costs” ([9]). The power is discretionary and involves two distinct hurdles: establishing special circumstances and then demonstrating that those circumstances warrant an order (Gizah Pty Ltd v AXA Trustees Limited (No. 2) [2001] NSWADT 164 at [29], cited at [10]).
The Tribunal adopted the established definition that special circumstances are “circumstances that are out of the ordinary, but without having to be extraordinary or exceptional” ([11]). Mere success in a review application is insufficient (Brooks Maher v Cheung [2001] NSWADT 18 at [11]; Hutchings Electrical v Director General, Department of Fair Trading (No. 2) [2002] NSWADT 255 at [18]). However, Practice Note 12 (reissued 11 May 2005) lists examples including where a party has conducted the proceedings in a way that has disadvantaged another, failed to comply with orders, caused adjournments, attempted to deceive, acted vexatiously, or has been responsible for prolonging unreasonably the time taken to complete the proceedings. The relative strengths of the claims, including whether a claim has no tenable basis in fact or law, is also relevant.
Applying those principles to the history set out at [1]–[7], Higgins S found that special circumstances arose when the Commissioner continued to rely on confidential criminal intelligence reports and information after the 28 July 2006 decision ([15]). In that earlier decision the Tribunal had found that the majority of the documents did not contain anything of a sensitive nature justifying a confidentiality order under s.75(2) of the ADT Act. The Commissioner was aware of the detailed (confidential) reasons yet chose to rely on materially identical further reports. Even if an argument based on ss.15(6) and (7) of the SI Act had been arguable before August 2006, it could not succeed after the publication of Habak v Commissioner of Police [2006] NSWADT 213 on 11 August 2006, a decision the Commissioner did not appeal ([16]).
The Tribunal expressly rejected any general inquiry into the quality of the Commissioner’s original administration, citing Raethel v Director-General, Department of Education and Training [2000] NSWADT 56 at [56]–[58] for the proposition that the costs power should not be used as “some kind of sanction to punish agencies for poor administration” ([12]). Instead, the decisive factor was the prolongation of the proceedings after 28 July 2006. That prolongation was unreasonable because the Commissioner had been put on clear notice both by the Tribunal’s own ruling and by Habak, yet only withdrew the material after the Tribunal reiterated the application of Veal principles at the April 2007 directions hearing.
Because the special circumstances crystallised on 28 July 2006, the costs order was temporally limited to legal costs incurred from that date ([17]–[18]). The order was that the Commissioner pay Mr Nastav’s legal costs “as assessed or agreed” from 28 July 2006.
Prior to this decision the law on costs in the Administrative Decisions Tribunal was settled by a consistent line of authority. Section 88 required “special circumstances” before any costs order could be made. Cases such as Brooks Maher v Cheung [2001] NSWADT 18, Gizah Pty Ltd v AXA Trustees Limited (No. 2) [2001] NSWADT 164, Raethel v Director-General, Department of Education and Training [2000] NSWADT 56 and Hutchings Electrical v Director General, Department of Fair Trading (No. 2) [2002] NSWADT 255 established that success alone was not enough, that the circumstances must be out of the ordinary, and that unreasonable prolongation or conduct that disadvantaged the other party could suffice. Practice Note 12 supplied a non-exhaustive list of examples focused on procedural misconduct.
In the specific context of security industry licensing, Habak v Commissioner of Police [2006] NSWADT 213 had recently clarified that s.15(7) of the SI Act could not override the Tribunal’s obligation to afford natural justice to an existing licence holder facing revocation. The present decision is the first reported ADT costs ruling to apply Habak in the costs context and to link persistence with undisclosed criminal intelligence to the “unreasonable prolongation” category in Practice Note 12.
After the decision, the SI Act was amended to deal expressly with the use of criminal intelligence material. The judgment notes these amendments but finds it unnecessary to consider them further ([16]). The core s.88 test remained unchanged until the ADT was replaced by the Civil and Administrative Tribunal of NSW, whose costs provision (s.60 of the CAT Act) retains an identical “special circumstances” formulation and has been interpreted consistently with the ADT authorities, including this one.
The decision also reinforced the direct application of High Court natural justice principles (Veal) to confidential-information cases in the security-licensing jurisdiction, a position that has guided subsequent revocation reviews.
Paragraph 9 quotes the pivotal words of s.88: “the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that there are special circumstances warranting an award of costs”. In plain English, the Tribunal cannot order costs just because someone wins; there must be something unusually unfair or inefficient about how the case was run.
At [11] the Tribunal states: “Special circumstances have been defined as ‘circumstances that are out of the ordinary, but without having to be extraordinary or exceptional’.” Translation: the hurdle is higher than “a bit unusual” but lower than “once in a lifetime”; it is a practical filter to stop routine cases attracting costs orders.
Paragraph 12 records the caution from Raethel that the costs power “should not be used as ‘some kind of sanction to punish agencies for poor administration’” and that the Tribunal should not embark on “a general enquiry into the way in which the agency dealt with the Applicant”. Plain English: the Tribunal will not use costs to conduct a broad audit of bureaucratic competence; it looks only at how the litigation itself was conducted.
The key dispositive passage appears at [15]: the special circumstances “arose when the Commissioner sought to continue to rely on confidential criminal intelligence reports and information notwithstanding my decision of 28 July 2006”. Translation: once the Tribunal had ruled that the intelligence had to be shown to Mr Nastav, the Commissioner’s decision to keep pressing with essentially the same material turned the case from ordinary into one that justified costs.
Finally, [17] states: “the conduct of the Commissioner prolonged unreasonably the time taken to complete the proceedings. However, that order should be reflective of the fact that the special circumstances did not arise until after 28 July 2006.” In plain English, the police’s stubbornness after the July ruling dragged things out, but they are not being penalised for everything that happened before that date.
This decision is triggered when an agency in a merits-review jurisdiction (particularly security-licensing or similar public-interest regimes) seeks to rely on material it knows, or ought to know, cannot lawfully be withheld on confidentiality grounds, and that reliance materially extends the life of the proceedings.
Specific triggers visible in the judgment include:
The precedent is not engaged by the mere use of criminal intelligence, nor by an unsuccessful review application, nor by an agency’s initial attempt to obtain a confidentiality order that is then abandoned promptly. The temporal limitation in the order emphasises that the “special circumstances” clock starts when the unreasonable conduct begins, not at the commencement of the review.
The judgment itself applies and follows a settled line of ADT authority. It follows Gizah at [10] for the two-hurdle analysis, follows Brooks Maher and Hutchings Electrical at [11] for the proposition that success is not enough, cites Raethel at [12] to confine the inquiry to litigation conduct rather than general administration, applies its own 28 July 2006 interlocutory decision at [15], and follows Habak at [5] and [16] on the limits of s.15(7) of the SI Act.
Because the Tribunal expressly limited the costs order to the period after 28 July 2006, later courts have treated the decision as authority for the proposition that the “special circumstances” inquiry is both factual and temporal: the conduct said to be out of the ordinary must be identified with precision and the costs order shaped accordingly. The decision’s treatment of Veal as directly applicable to security-licence revocations has been regarded as reinforcing the primacy of procedural fairness even where statute appears to authorise confidentiality.
The judgment has been cited in subsequent ADT and NCAT decisions as an illustration of “unreasonable prolongation” within the meaning of Practice Note 12 (and its NCAT successor). Its careful refusal to sanction the Commissioner for the original revocation decision itself (citing Raethel) has been read as confirming that the costs jurisdiction is not a vehicle for broad merits criticism of administrative action.
The judgment notes that amendments were subsequently made to the SI Act in respect of criminal intelligence material but finds it “unnecessary to consider these any further” ([16]). The precise interaction between the amended provisions and the procedural-fairness obligations affirmed in Habak and this decision therefore remains untested in the reported reasons.
A further open question is the position of an unrepresented applicant who later obtains legal representation solely for the costs application. The Tribunal received submissions from Mr Nguyen after Mr Nastav had appeared unrepresented at the final directions hearing, but did not discuss whether that change of representation affected the quantum or recoverability of costs.
The decision leaves open the circumstances in which an agency’s reliance on confidential material might be regarded as reasonable even after an adverse ruling, for example where fresh, materially different intelligence emerges or where an appeal against the confidentiality ruling is on foot. Higgins S’s statement that the additional material was “in effect no different” to that already ruled upon ([7]) implies that a fact-sensitive comparison is required, but the precise boundaries of that comparison are not exhaustively mapped.
Finally, the relationship between the Veal principles and any future statutory amendments that expressly authorise non-disclosure in security-licensing matters is not addressed. The Tribunal’s clear statement that Veal applies “equally to the current application” ([7]) suggests that constitutional natural-justice requirements may survive even clear statutory language, but that proposition was not tested to finality in these proceedings because the Commissioner withdrew.
Most practitioners assume that because the ADT (and now NCAT) operates under a “no costs the norm” presumption, agencies can litigate review applications aggressively without financial risk. This decision is a sharp reminder that once an interlocutory ruling on confidentiality or procedural fairness has been made and not appealed, continued reliance on the excluded material is not cost-neutral; it can crystallise “special circumstances” from the date of that ruling. The temporal limitation to costs “from 28 July 2006” is the gotcha: agencies cannot assume that an early costs application will capture the whole proceeding if the objectionable conduct began midway through.
Another trap is treating Habak and this decision as confined to their facts. The Tribunal’s willingness to import High Court Veal reasoning into the security-licensing context, and to treat an un-appealed ADT ruling as effectively binding on the same parties in the same matter, means that counsel advising agencies must obtain instructions to appeal confidentiality rulings promptly or accept that persistence will carry a costs risk. The Commissioner’s solicitor’s repeated on-the-record concession that withdrawal of the material would necessitate setting aside the decision made the prolongation finding almost inevitable once the confidentiality ruling stood. Agencies that give similar concessions should treat them as high-risk admissions in any later costs argument.
CITATION: Nastav v Commissioner of Police, NSW Police [2007] NSWADT 291
APPLICANT Stephen Nastav PARTIES: RESPONDENT Commissioner of Police, NSW Police
Administrative Decisions Tribunal Act 1997 LEGISLATION CITED : Security Industry Act 1997 Security Industry Regulation 1998
Brooks Maher v Cheung [2001] NSWADT 18 Gizah Pty Ltd v AXA Trustees Limited (No. 2) [2001] NSWADT 164 CASES CITED: Habak v Commissioner of Police [2006] NSWADT 213 Hutchings Electrical v Director General, Department of Fair Trading (No. 2) [2002] NSWADT 255 Nastav v Commissioner of NSW Police [2006] NSWADT 215 Raethel v Director-General, Department of Education and Training [2000] NSWADT 56
Q Nguyen, barrister REPRESENTATION: W Pisiani, solicitor
ORDERS: The Commissioner to pay Mr Nastav's legal costs, as assessed or agreed, from 28 July 2006.
REASONS FOR DECISION Introduction 1 On 13 April 2006, Mr Nastav sought external review of a decision of the Commissioner of Police, NSW Police ('the Commissioner') to revoke his Class 1ABC, Class 2B and Master Security Licence that had been issued by the Commissioner pursuant to the Security Industry Act 1997 ('the SI Act'). There were two grounds relied on by the Commissioner in making his decision. These were that Mr Nastav was no longer a fit and proper person to hold the licences and that it was not in the public interest for Mr Nastav to hold these licenses: section 26(1)(c) and (d) of the SI Act and clause18 of the Security Industry Regulation 1998. 2 On 21 April 2006, on the application of Mr Nastav, Deputy President Magistrate Hennessy stayed the decision of the Commissioner pending the determination of Mr Nastav's application before the Tribunal. 3 On 27 April 2007, by consent, I made an order that the decision of the Commissioner be set aside. The matter had a protracted history as the Commissioner sought to rely on criminal intelligence reports and other criminal information to support his decision and furthermore, in line with section 15(7) of the SI Act the Commissioner sought to place this material before the Tribunal on a confidential basis without Mr Nastav or his legal representative having access to the reports and information or any knowledge of what was contained therein. By consent, a hearing was conducted on 10 May 2006 on the preliminary issue of the Commissioner's application that the Tribunal make a confidentiality order under section 75 of the Administrative Decisions Tribunal Act 1997 in regard to the information and reports relied on by the Commissioner in his decision. At this hearing Mr Nguyen, counsel for Mr Nastav, argued that the orders sought by the Commissioner would in effect deny Mr Nastav procedural fairness, which the tribunal was bound to provide under section 73(2) of the Administrative Decisions Tribunal Act 1997. 4 On 28 July 2006, I determined that with the exception of one document(s), the Tribunal should dismiss the Commissioner's application for confidentiality orders in regard to the material on which the Commissioner sought to rely: see Nastav v Commissioner of NSW Police [2006] NSWADT 215. The application was refused on grounds of denial of procedural fairness. 5 Notwithstanding this decision, the Commissioner continued to rely on document(s) that I had indicated were confidential in nature and which would not ordinarily be disclosed. The Commissioner also sought to supplement this material with further criminal intelligence material. Mr Nguyen reiterated his earlier submissions and also relied on a then recent decision of Deputy President Magistrate Hennessy in Habak v Commissioner of Police [2006] NSWADT 213. In that decision Her Honour held that section 15(7) of the SI Act could not be used by the Commissioner to deny natural justice to an existing licence holder when determining to revoke that person's licence. On 21 November 2006, the parties consented to the tribunal determining the application on the papers, which included the additional confidential material filed by the Commissioner. 6 At all times Mr Pisani, for the Commissioner, advised the Tribunal that in the event the tribunal rejected the Commissioner's application for confidentiality in regard to the criminal intelligence reports and information, the Commissioner would withdraw this material. At the same time, Mr Pisani conceded that the Tribunal would be required to set aside the Commissioner's decision the subject of review as there would be no material before it to support the Commissioner's decision. 7 At my direction, the Registry re-listed the matter for further directions on 27 April 2007. At this directions hearing I advised the parties that in my opinion the principles set out by the High Court in Veal v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72 applied equally to the current application and on those principles to deny Mr Nastav an opportunity to know the content of the allegations made against him in the criminal intelligence reports and information would be a denial of natural justice. I explained that on further consideration I had formed the view that the additional material on which the Commissioner had sought to rely was in effect no different to the material that was the subject of my decision on the preliminary issue and for which an order of confidentiality was not justified. After seeking further instructions in light of my findings, Mr Pisani, informed the tribunal that the Commissioner would withdraw the material he sought to rely on and that the Commissioner would consent to his decision, the subject of review, being set aside. 8 When the matter was brought back for directions, Mr Nastav was not legally represented. However, on 17 May 2007, Mr Nguyen made a written application for costs on behalf of Mr Nastav. A similar application had been made by Mr Nguyen on 6 October 2006. In light of this earlier application, I set a timetable for the filing and serving of material in respect to Mr Nastav's application for costs and I requested the Registrar to advise the parties accordingly. Material was provided in accordance with these directions by Mr Nguyen on behalf of Mr Nastav. No submissions were received by the Commissioner. Principles governing costs 9 The Tribunal has no inherent power to award costs. Its power to award costs is set out in s.88 of the Administrative Decisions Tribunal Act 1997, which relevantly provides that 'the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that there are special circumstances warranting an award of costs'. (italics added) 10 This power is a discretionary power and in order to obtain a cost order an applicant has two hurdles to overcome. The first hurdle is to satisfy the tribunal that there are 'special circumstances' and the second hurdle is to satisfy the tribunal that these circumstances warrant an award of costs: see Gizah Pty Ltd v AXA Trustees Limited (No. 2) [2001] NSWADT 164 at [29]. 11 'Special circumstances' have been defined as 'circumstances that are out of the ordinary, but without having to be extraordinary or exceptional'. It is well established that mere success in a review application does not constitute special circumstances: see Brooks Maher v Cheung [2001] NSWADT 18 at [11] and Hutchings Electrical v Director General, Department of Fair Trading (No. 2) [2002] NSWADT 255 at [18]. In Brooks the Tribunal noted that while the circumstances which would or would not warrant an award of costs could not be exhaustively listed, '… where one party causes another party to incur costs because of unreasonable delays, or by making misconceived, frivolous, vexatious or insubstantial procedural or substantive applications, an award of costs may be warranted'. 12 The power to order costs should not be used as 'some kind of sanction to punish agencies for poor administration', and the tribunal should not embark on 'a general enquiry into the way in which the agency dealt with the Applicant': Raethel v Director-General, Department of Education and Training [2000] NSWADT 56 at [56] - [58]. 13 Practice Note 12 (reissued on 11 May 2005) provides that 'special circumstances' which may warrant an order for costs under section 88(1) of the Administrative Decisions Tribunal Act 1997 are where 'a party has conducted the proceedings in the way that disadvantaged another party to the proceedings'. It cites the following examples of such conduct: '(i) failure to comply with an order or direction of the Tribunal without reasonable excuse; (ii) failing to comply with this Act, the regulations, the rules or enabling enactment; (iii) asking for an adjournment as a result of (i) or (ii); (iv) causing an adjournment; (v) attempting to deceive another party or the Tribunal; (vi) vexatiously conducting the proceedings; (vii) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings; and (viii) 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.' Special Circumstances 14 Mr Nastav argues that the proceedings themselves are sufficient to constitute special circumstances. He asserts that it was a decision that effectively took away his livelihood and that of his business, without Mr Nastav knowing the factual basis on which the decision was made. That is, it was a decision made without any due regard to procedural fairness which the Commissioner sought to perpetuate during the course of the hearing before the tribunal. The Commissioner, he asserted, was wholly unjustified in his approach from the beginning as there was no basis in law or fact for making his original decision and Mr Nastav had been vindicated by the outcome of the application in that he had at all times argued that the Commissioner could not proceed as he had done. 15 In my opinion, having regard to the abovementioned principles in regard to what constitutes 'special circumstances', the history of this application does give rise to special circumstances. These special circumstances arose when the Commissioner sought to continue to rely on confidential criminal intelligence reports and information notwithstanding my decision of 28 July 2006. In that decision at [33] I found that the majority of the documents did not contain anything of a sensitive nature which would justify a confidentiality order under section 75(2) of the Administrative Decisions Tribunal Act 1997. Appended to my decision were confidential reasons in regard to these findings. Accordingly, the Commissioner was aware of the basis on which I had made my findings and in relation to which documents those findings related. Notwithstanding these findings, which were not appealed by the Commissioner, he again sought to rely on material that was of a nature similar to those for which an application for confidentiality was refused. 16 Even if it were to be accepted that there was an arguable case as to whether the Commissioner, by reason of section 15(6) and (7) of the SI Act could seek orders that the Tribunal make a confidentiality order under section 75 of the ADT Act where the Commissioner had revoked a security licence on the basis of criminal intelligence material, any such argument would not succeed following the decision of Deputy President Magistrate Hennessy in Habak (supra), which was published on 11 August 2006. Again the Commissioner did not appeal this decision. It is noted that amendments were subsequently made to the SI Act in regard to criminal intelligence material. It is unnecessary to consider these any further. Do the special circumstances warrant an order for costs? 17 In my opinion the special circumstances in this application do warrant an order for costs as the conduct of the Commissioner prolonged unreasonably the time taken to complete the proceedings. However, that order should be reflective of the fact that the special circumstances did not arise until after 28 July 2006. 18 Accordingly, the appropriate order is that the Commissioner be required to pay Mr Nastav's legal costs, as assessed or agreed, from 28 July 2006.
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.
Nastav
Commissioner of Police, NSW Police
The Commissioner to pay Mr Nastav's legal costs, as assessed or agreed, from 28 July 2006.