Rodny v Stricke

NCAT Appeal Panel|2018-08-03

Introduction

On 31 May 2018, the Appeal Panel made orders and published reasons for decision in connection with an appeal concerning orders made by the Tribunal under s 45 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) to permit the parties legal representation: Rodny v Stricke [2018] NSWCATAP 136 (Principal Reasons).
In making those orders, the Appeal Panel noted at [155] that the appellant had been partly successful. The parties were permitted to make an application for costs.
The respondents have applied for an order for costs in their favour, having filed written submissions in support of that application on 8 June 2018 (respondents' cost application). The costs application sought a fixed sum amount to be assessed by the Appeal Panel.
The appellants oppose an order for costs and filed written submissions.
In addition to the respondents' cost application, the appellants also applied for costs (appellants' costs application).
The respondents opposed the appellants' application and filed submissions in reply.
We will return to the substance of the costs applications below.
In addition to the cost applications, the appellants, through Mr LePage, wrote to the Tribunal on 6 June 2018 (Le Page letter) contending that the Tribunal had failed to perform its duty to resolve all issues in the proceedings. The appellants relied on the High Court decision in Minister for Immigration and Multicultural Affairs v Bhardwaj 209 CLR 597; [2002] HCA 11 and asked that the Appeal Panel relist the proceedings in order to resolve the issues raised (the Bhardwaj application). The respondents opposed this course, in a letter sent to the Tribunal dated 6 June 2018. In short, the respondents contended there had been no relevant failure by the Appeal Panel.

Directions and documents received in respect of the costs application

In its Principal Reasons, the Appeal Panel at [156] provided a timetable for the parties' submissions in relation to any costs application. Subsequently, by direction dated 4 July 2018, the Appeal Panel made a further direction to allow the parties an opportunity to provide submissions about whether a hearing of the costs applications should be dealt with on the papers and an order made dispensing with a hearing pursuant to s 50(2) of the NCAT Act.
The Appeal Panel has received the following submissions: 1. Appellants' costs application 1. Appellant's application on costs and appellants' submissions on costs dated 10 June 2018; 2. Respondents' response to the appellants' submissions on costs dated 19 June 2018. 1. Respondents' cost application 1. Respondents' submissions on costs dated 7 June 2018 including an affidavit of Stephen Michael Morrissey affirmed 7 June 2018; 2. Appellants' submissions on respondents' costs application dated 14 June 2018; 3. Respondents' submissions on costs in reply dated 21 June 2018.
In relation to whether a hearing of the costs application could be dispensed with pursuant to s 50(2) of the NCAT Act, the appellants submitted that such an order should be made. The respondents did not oppose such an order "if the Appeal Panel is satisfied that the issues for determination can adequately be determined in the absence of the parties, on the basis of the written submissions and other material lodged with the Appeal Panel."
The Appeal Panel has afforded the parties an opportunity to make relevant submissions and is satisfied that an order should be made dispensing with a hearing of the costs applications in the present circumstances. This will avoid unnecessary costs and, having regard to the comprehensive submissions, a hearing is not required.

Directions and documents received in respect of the Bhardwaj application

On 18 June 2018, the Appeal Panel directed the parties to file submissions in relation to the Bhardwaj application, including on the issue of whether the matter should be decided on the papers and an order made dispensing with a hearing. Order 1 required the appellants to file and serve submissions in relation to the matters raised in the Le Page Letter, including details of the specific orders sought and including submissions on the topic of whether Le Page Lawyers or Mr Le Page could represent the appellants on the Bhardwaj application, in light of the orders and Principal Reasons concerning representation in the appeal proceedings.
In relation to the Bhardwaj application, the following submissions were received: 1. Appellants' submissions dated 22 June 2018; 2. Respondents' submissions dated 26 June 2018; and 3. Appellants' submissions in reply dated 28 June 2018.
Both parties consented to the Bhardwaj application being dealt with on the papers and to an order being made under s 50(2) of the NCAT Act, dispensing with a hearing.
Despite the clear directions of the Appeal Panel, however, the appellants did not, in their submissions or otherwise, set out the specific orders sought in the Bhardwaj application. Rather, having contended that the Appeal Panel was not functus officio, the appellants said at [11]-[13] of their submissions dated 22 June 2018: "11. In relation to the representation of Clyde & Co of the 5 Committee Members, the Appeal Panel found that "there is no basis to conclude that they have not consented to Clyde & Co acting on behalf of STRATA Committee members". However the Appeal Panel did not turn its mind to the question of whether those interests are or may be inconsistent, or whether, as a result, Clyde & Co were in breach of their fiduciary duties to each of the Committee members. 12. The existence of an actual or potential inconsistency in their interest was a real issue in the proceedings before the Senior Member and before the Appeal Panel, as it was one of the 2 principal bases on which the Appellants challenged a grant of leave to the Respondents to be represented by Clyde & Co. It is an issue which the Tribunal below, and the Appeal Panel on appeal, failed to resolve. 13. At [147], the Appeal Panel implicitly recognised as a "real issue" the issue of "whether or not the Owners Corporation should have separate representation because its interest might divert from those of its Strata Committee. However the Appeal Panel did not resolve the issue of whether there was an actual or by potential divergence. So it could not resolve the real issues raised in the Tribunal below and on appeal: whether there was an actual or potential divergence and if so; whether Clyde & Co had acted in breach of its fiduciary duty to each of its clients; and whether, in those circumstances, leave to be represented by Clyde & Co should be granted to any of the respondents."

Representation

Before turning to the substance of the parties' submissions, it is necessary to first decide whether it is appropriate for the Appeal Panel to receive written submissions and applications from Mr Le Page or his firm. In the Principal Reasons at [90] the Appeal Panel noted the parties' agreement that the right of "representation", as referred to within the meaning of s 45 of the NCAT Act, referred to representation during hearings before the Tribunal. Whilst the boundaries of that agreement were not there tested, in the interests of expediency, and as we have resolved to determine these matters on the papers, and because the respondents did not make any applications in this regard (as noted below), we have determined to accept those submissions and applications. In doing so, we should not be taken as approving what has occurred.

Bhardwaj application

It is appropriate to deal with the Bhardwaj application before the costs applications.

Submissions

In the Le Page letter the appellants sought to "specifically" identify the asserted failures of the Appeal Panel in the performance of its duty and in respect of the Principal Reasons. It was said as follows: "1. In relation to the First to Fifth Respondent, the learned Members found at [143] that they had consented to Clyde and Co acting for all of them, and having made that finding, did not then consider whether there was a real possibility of inconsistency of interest among those respondent (or whether such consent as they had provided to concurrent representation had been fully informed). 2. In relation to the First to Fifth Respondents and the Sixth Respondent, the Members found at [144] that it was conceivable that the representation of the Sixth Respondent by Clyde & Co should have been approved by the members in general meeting, rather than by the Strata Committee. The learner Members did not come to any finding about whether, as a matter of fact, there was a real possibility of inconsistency in the interests of the parties, apparently considering (at [150]) that it was a matter for determination by the members in general meeting. The absence of any finding as to the possibility of inconsistency is emphasised by the absence of reasons for the learned Members' finding that the representation of the Sixth Respondent by Clyde & Co should have been decided by the general meeting, rather than the Strata Committee alone."
In their submissions dated 22 June 2018, the appellants referred to the Appeal Panel's functions and to the obligations on the Appeal Panel pursuant to ss 36(2), 38(2) and 38(5)(c) of the NCAT Act. After referring to the statement of Hayne J in Bhardwaj at [155], it was submitted that if the Tribunal failed to discharge its statutory functions and comply with its statutory requirements, it retained power to do so and had a duty to do so. In such circumstances, so it was submitted, the Tribunal was not functus officio.
At [8] of those submissions, the appellants noted that the Tribunal had found, at first instance, that the respondents' choice of legal representation was "entirely a matter for them" and that the First to Fifth Respondents were entitled to instruct lawyers on behalf of the Owners Corporation as they did. The appellants then submitted, at [9]: "The Appellants appealed against these findings: Grounds of Appeal paragraphs 8, 9, 11 and 13, being essentially a failure to find a real and significant possibility of inconsistency in the interests of the First to Fifth Respondent, and between the interests of the First to Fifth Respondents and the Sixth Respondent; a breach of fiduciary duty on behalf Clyde & Co in acting for all of them; and in finding that the choice of legal representatives was entirely a matter for the Respondents (that is, that the appointment could be made without regard to the inconsistency of their respective interests)."
Grounds 8, 9, 11 and 13 were as follows: "8. In finding that there was no evidence that the First to Fifth Respondents were not entitled to instruct lawyers on behalf of the Sixth Respondent "in the manner that they did". 9. In failing to find a real and significant possibility that the interests of each of the First to Fifth Respondents, and/or that the interests of the First to Fifth Respondent and of the Sixth Respondent, may be inconsistent. 11. In failing to find that Clyde & Co would be in breach of their fight usury duty to each of them in each case by acting for both of them. 13. In finding that the Respondents' selection of the legal representatives was entirely a matter for the Respondents".
The appellants contended that the Appeal Panel failed to turn its mind to the question of whether the various interests may be inconsistent and/or whether "Clyde & Co were in breach of their fiduciary duties to each of the Committee members". The appellants submitted that while the Appeal Panel implicitly recognised that there was a real issue about whether or not the Owners Corporation should have separate representation, because its interests might diverge from those of the Strata Committee, the Appeal Panel did not resolve the issue of whether there was actual or potential divergence.
The appellants then submitted that, while the Appeal Panel had noted (at [150] of the Principal Reasons) that the Owners Corporation can, in general meeting, "determine whether there is any relevant divergence of interest that warrants the extra cost incurred by the appointment of several lawyers", the "actual or potential divergence of interest will have consequences that are not resolved by a decision about whether additional cost is warranted" (at [14] of the appellants' submissions).
Consequently, so the appellants submitted, "the real issue of the existence or of an actual or potential divergence of interest was not resolved, although the need for resolution was recognised" by the Appeal Panel.
In response, in the respondents' submissions dated 26 June 2018, it was submitted that the Appeal Panel had, in fact, dealt with grounds 8, 9, 11 and 13 in its reasons. In particular, the respondents submitted that the Appeal Panel had made determinations in connection with: 1. Unauthorised appointment of lawyers at Principal Reasons [54]-[56]: at [11]; 2. Consent of all strata committee members at Principal Reasons [142]-[150] and [152]: at [12]-[15]; 3. Clyde & Co being in breach of fiduciary duties at Principal Reasons [57]-[60]: at [16]-[17]; 4. Respondents' selection of legal representation at Principal Reasons [55], [59]-[60], [92]-98] and [142]-[150]: at [18]-[19].
Consequently, the respondents categorised the appellants' application as one of dissatisfaction with the decision which "should be ventilated through more appropriate means (if at all)": at [19].
In relation to Le Page Lawyers or Mr Le Page representing the appellants, the respondents noted that the Appeal Panel had made orders "prohibiting" the individual or firm from representing the appellants on the appeal and contended that it was "entirely inappropriate and in contempt of the Appeal Panel's order." We note, however, that no application was made in this regard.
Finally, the respondents contended that the appellant had "unreasonably" prolonged the time taken to complete the appeal proceedings, that they had failed to comply with their duty under s 36(3) of the NCAT Act and that an order for costs should be made in favour of the respondents pursuant to s 60(2) of the NCAT Act.
In reply, the appellants submitted that the fact there may be available a challenge by way of appeal did not prevent the appellants from making this application, nor did it discharge the Appeal Panel from its duty to resolve the real issues before it.
Further, it was submitted that it is the duty of Clyde & Co to "identify any inconsistency of interest amongst the various Respondents, all of whom they wish to represent" and that the lawyers are "bound to obtain the fully informed consent (as that term is properly understood in this context) to concurrent representation of the Respondents with inconsistent interests." The appellants submitted that inconsistency of interest is not dealt with by resolution of the Strata Committee (or the consent of its members) or of the Owners Corporation in general meeting to retain Clyde & Co. In other words, the appellants contend that whether or not there was a divergence (or potential divergence) of interests or a breach of fiduciary duty is not resolved by either resolution of the Strata Committee or consent.
The appellants submitted that the "contrary view" of the Appeal Panel in the Principal Reasons at [143] and [145] explains why the Appeal Panel has failed to come to a determination about the threshold issue, namely whether there is an inconsistency of interest between the various respondents. The appellants submit that determination of this issue precedes the question of consent for the lawyers to act.
Further, the appellants submitted that the respondents do not deny that the issue of divergence of interest needs to be resolved by the Appeal Panel, but rather that the respondents' contention is that the issue has in fact been resolved.
Finally, the appellants then made submissions concerning the particular paragraphs of the Principal Reasons to which the respondents referred and submit that the Appeal Panel failed to make findings in connection with whether there was, or potentially was a divergence of interests between each of the respondents which made it inappropriate for Clyde & Co to act and/or whether Clyde & Co were in breach of their fiduciary duty.
No submissions were made by the appellants in connection with the respondents' application for costs for this application.

Consideration

In the Principal Reasons, the Appeal Panel made orders in connection with whether or not Le Page Lawyers would be granted leave to represent the appellants and whether Clyde & Co would be granted leave to represent the respondents. Those orders were as follows: "2. In respect of the appeal against the condition imposed in respect of representation of the appellants by an Australian legal practitioner other than Mr Le Page and his firm, the appeal is dismissed. 3. In respect of the appeal against the grant of leave for the respondents to be legally represented, the appeal is allowed in part and the order is varied to read as follows: a) Leave is given to the respondents to be legally represented. b) The preceding order is conditional on the Owners Corporation not being represented by the same Australian legal practitioner or law firm as the other respondents unless the Owners Corporation in general meeting approves such an appointment."
Those orders constitute the decision of the Appeal Panel: see s 5 of the NCAT Act.
The reasons for that decision are set out in the Principal Reasons.
The effect of the appellants' submissions is that in making its decision, the Appeal Panel did not deal with all the issues. In particular, the appellants submit that the Appeal Panel left unresolved the questions of whether or not there was a divergence (or potential divergence) of interests as between the respondents, or a breach of fiduciary duty, in Clyde & Co acting for all the respondents. The appellants describe the unresolved issues as threshold issues. In other words, determination of those issues was necessary in order to come to the ultimate outcome. This, the appellants categorised as a breach of duty by the Appeal Panel. Consequently, so it is submitted, the Appeal Panel has power to set aside its decision and make an alternative decision having regard to the principle in Bhardwaj.
In essence, the appellants contended the following: 1. The questions of whether there was, or potentially was, a divergence of interests as between the respondents and/ or a breach of fiduciary duty in Clyde & Co acting for all respondents, were issues in the appeal proceedings. 2. The Appeal Panel did not determine those issues, as demonstrated by: 1. the absence of reasons on those issues; and 2. the fact that the Appeal Panel considered (at least implicitly) that consent resolved or was capable of resolving those issues. 1. However, consent would (or could) not resolve (or cure) the divergence of interests or breach of fiduciary duty. 2. Accordingly, the Appeal Panel was required to decide if there was a divergence of interests or breach of fiduciary duty, before deciding if it was appropriate for all of the respondents to be represented by the same legal representative.
The respondents, on the other hand, contend that all issues have already been determined and it is not for the Appeal Panel to remake its decision. Implicitly, the respondents take issue with subparagraphs (2) and possibly (3) of the appellants' contentions in the previous paragraph. Significantly, the respondents contest the appellants' construction that there has been an error of a type that warrants or permits a reconsideration of the Principal Reasons.
The parties' submissions illustrate a divergence of opinion about what findings the Appeal Panel reached and was required to reach in the Principal Reasons. However, the orders as set out in the Principal Reasons are clear and no alternative orders have been proposed by the appellants.
Cases such as Bhardwaj and Atkinson v Crowley [2011] NSWCA 194 provide examples about when a decision-maker might set aside its own decision because of jurisdictional error. Section 53 of the NCAT Act itself recognises circumstances in which the Tribunal may set aside its own decision where there is a relevant irregularity. However, for the reasons that follow, it is unnecessary to deal with the nature and extent of the power which the Tribunal might have to set aside its own orders, whether sitting at first instance or on appeal.
Here, there is no claim for relief that has not been determined and there is no decision left to be made and so the Appeal Panel is functus officio.
Nevertheless, the appellants assert, in effect, that the final orders of the Appeal Panel are infected with error in that threshold issues remain unresolved and are therefore amenable to be reopened.
Even if there was power for the Appeal Panel to consider the issues raised by the appellants, we should not do so and decline to do so. There are a number of reasons for this view.
First, as reflected in the appellants' submissions at [9], set out above, the appellants starting point to their analysis is that they had a right to and had "appealed against findings". There is generally no right to appeal a finding. An appeal is in respect of a decision, not the reasons for decision: see s 80(2) of the NCAT Act.
Secondly, and despite being ordered to particularise the orders sought, other than seeking a re-opening, there is no particular order sought by the appellants. No alternative order is sought by the application. Even if it might be inferred that the appellants ultimately seek an order that the respondents be denied leave to be represented by Clyde & Co because, in the appellants' submission, there is a risk of divergence of interests and consent does not cure any divergence of interests, such an order would be inconsistent with the current orders of the Appeal Panel and there is a live contest about whether or not those orders were made in error and if so, jurisdictional error.
In Michael v Secretary, Department of Employment, Science and Training [2006] AATA 227, the President of the Administrative Appeals Tribunal, Downes J said at [9]-[17]: "9. Bhardwaj was a simple, and perhaps obvious, case. An administrative error resulted in the person constituting the Tribunal being unaware of an application for an adjournment. The matter proceeded without consideration of the application and in the absence of the applicant. When the error was discovered it is not surprising that the matter was relisted and considered afresh. These were the facts which the High Court was asked to consider. The Court did not address the question of when it is appropriate for a Tribunal to reconsider a matter. 10. There are problems of substance as well as practical problems in a tribunal reconsidering its own decision. The original decision contains its own assertion, express or implied, that it is given within jurisdiction. How can the same tribunal be subsequently reconstituted with power to determine that the first assertion is wrong? How are such applications to be dealt with in practice? A fresh application for review seems inappropriate because the argument is that the original application is on foot and has not been dealt with. On the face of the Tribunal's record, however, the application has been dealt with and the tribunal is functus officio. The practical problems are obvious. Does every application for reconsideration have to be heard? Should such an application be heard by the tribunal as originally constituted or by a differently constituted tribunal? In the latter case, is it appropriate for the tribunal to follow the earlier decision, in comity? Should every complaint made by a disappointed party be treated as an application for reconsideration under Bhardwaj? 11. Bhardwaj itself was an example of the kinds of problems which can arise. The real issue in Bhardwaj was which of the two purported decisions of the Tribunal was the proper exercise of jurisdiction (see Hayne J at 647; compare at 642). If the first decision was within jurisdiction then that was its lawful decision. The second decision is the decision which was no decision at all. This indeed was the argument presented on behalf of the Minister for Immigration and Multicultural Affairs. 12. It is not competent for a Tribunal to make a binding, or any, ruling as to whether it has made an error of law. It is at least theoretically possible that the Federal Court or the High Court might have ruled in Bhardwaj that it was not a denial of natural justice to proceed with the first hearing because, for example, the adjournment application was not supported by evidence or was the latest of many similar applications. In that event, the second decision of the Immigration Review Tribunal would only have created needless doubt. 13. It follows that, except in the clearest case, the making of a second decision by a tribunal will only lead to uncertainty of result. This is, at the least, a sound reason for a tribunal to act with extreme caution before reconsidering a matter which has already been decided. 14. Only one justice in Bhardwaj addressed the question of when it might be appropriate for a tribunal to reconsider a decision. Hayne J said this (at 645): "It is, therefore, not to the point to ask whether the Tribunal was wise to make its October decision without first having the comfort and certainty of a court order holding the September decision to have been not a lawful performance of the Tribunal's duties any more than it is to the point to ask about the efficiency of adopting the course that was followed in this matter." 15. It seems to me that because of the substantive and practical problems I have adverted to it will very rarely be "wise" for a tribunal to reconsider its own decisions. 16. Gleeson CJ characterised the error in Bhardwaj on four occasions as "administrative oversight", "administrative slip" or "administrative error" (at pp 602, 605(2) and 606). Kirby J, in dissent, used the phrase "administrative error" three times (at pp 627 and 630(2)). The justices were referring to the fact that the underlying cause of the error was a matter of administration internal to the Registry of the Immigration Review Tribunal and not something associated with the actual conduct of the hearing or the process of decision-making following it. Accordingly, one appropriate basis for a limitation on reconsideration in accordance with Bhardwaj is confining such cases to cases of administrative or similar error. 17. For all these reasons, I conclude that it will only be appropriate for tribunal decisions to be reconsidered pursuant to the Bhardwaj principle when an impugned decision was obviously wrong and when the cause of the error is some administrative or similar mistake. In all but the rarest of cases, tribunal decisions must be treated as final and subject only to reconsideration for error of law on appeal."
The observations of Downes J, about the need for restraint in reconsidering any decision, were approved by Collier J in Christiansen v Social Security Appeals Tribunal [2010] FCA 1146 at [66], her Honour otherwise accepting that an administrative decision made beyond jurisdiction could be re-made by the same tribunal.
Thirdly, seeking a determination on the issues raised in the application might be seen as an attempt to get a final ruling on the conduct of individual committee members and the appropriateness of decisions made by the strata committee and the Owners Corporation. Those issues appear to be the issues in the substantive application, which is still to be heard once the parties have had a chance to provide their evidence.
Fourthly, in Bhardwaj in the High Court there was agreement, as between the parties, that in making the first decision the Tribunal had denied the applicant "a reasonable opportunity to answer the case against him" and thus involved a breach of natural justice (see for instance per Gaudron and Gummow JJ at [41]) and further, it was apparent that the Tribunal itself appreciated that it had failed to give effect to its own intention and to comply with the statutory requirement to afford the applicant an opportunity to be heard (per Gleeson CJ at [15]).
Here, the respondents dispute that there has been any error at all.
In these circumstances, where there is a divergence of opinion concerning the matters which the Appeal Panel determined, the reasons for decision and whether the Appeal Panel made relevant findings and appropriately exercised its powers under the relevant legislation, we should decline to consider the matter further. As pointed out by Downes J in Michael, for the Appeal Panel to make a second decision or to add to the reasons previously given is fraught with the possibility of providing conflicting opinions concerning what has been decided.
Finally, as made clear at [96] of the Principal Reasons, the Tribunal (including the Appeal Panel) "has no general power to restrain an Australian legal practitioner from acting for a particular party and has no inherent jurisdiction to regulate the conduct of an Australian legal practitioner". Many of the issues raised by the appellants, in effect, seek to have the Tribunal regulate or express opinions about the conduct of Clyde & Co, comment about decisions made by particular respondents, or to express views about particular matters.
Whether we have fallen into error in making the decision and providing the Principal Reasons is not generally a matter about which we should enquire or make further comment. Nor is it appropriate that we provide further reasons on particular issues which the appellants assert were not dealt with and/or were necessary to resolve in order to determine the appeal.
The appellants are entitled to exercise whatever rights they may have in connection with the Principal Decision.
It follows that, even if there was power to do so, we should not embark upon a review of the Principal Reasons in the present circumstances. Accordingly, the Bhardwaj application is dismissed.
We will deal with the issue of costs of this application as part of the respondents' application for costs below.

Costs applications

It is convenient to deal with both the appellants' and the respondents' applications for costs together.

Submissions - Appellants' application for costs

The appellants sought the following orders in respect of costs: "1. In relation to the representation of the [appellants] below, that the respondents pay 75% of the appellants' costs, as agreed or assessed; and 2. In relation to the representation of the respondents, that the respondents pay the appellants' cost as agreed or assessed."
In relation to representation of the appellants, the appellants submitted that three grounds of appeal were advanced in the Reply to Appeal and in written submissions, namely conflict of interest, confidential information and Mr Le Page as a witness. The appellants submitted that the respondents also raised new grounds in their written submissions and only "referred cursorily" to one of two grounds upon which the Appeal Panel found for the respondents, namely the appearance of Mr Le Page "readily changing sides". Having referred to various authorities concerning legal representation and the proper administration of justice, the appellants submitted that the Appeal Panel had "properly rejected" the claim that Mr Le Page was in possession of confidential information. Consequently, the appellants said that the respondents' submissions "sat uneasily" with the principle that a finding of fiduciary and contractual duties owed by a solicitor to a client cease upon termination of the retainer.
In relation to special circumstances and the requirements of s 60 of the NCAT Act in respect to an award of costs, the appellants submitted that the respondents had made a number of claims which they had failed to substantiate. The appellants submitted that the respondents' submissions in connection with the onus of proof were "fanciful" and amounted to a departure from the position that the respondent had previously adopted.
In relation to representation of the respondents, the appellants maintain their position that Clyde & Co had breached its fiduciary duty by acting without the fully informed consent of those instructing, and that there was a "real possibility of inconsistency in the interests of the First to Fifth Respondent, and of the First to Fifth Respondents and of the Sixth Respondent". The appellants maintain their position that the "Appeal Panel did not determine the issues relating to the inconsistency of interest and the related question of the propriety of Clyde & Co's acting". However, the appellants say the Appeal Panel did agree with the appellants' contention that the retainer of Clyde & Co was a matter for the Owners Corporation to determine in general meeting.
As to special circumstances, the appellants referred to the "real possibility of inconsistency of interests" being obvious and that the respondents were wrong in their submission about the propriety of Clyde & Co acting.
The appellants said the issue of representation of the Owners Corporation could have been referred to a general meeting and dealt with quickly and cheaply and, to that extent, the expense of the proceedings has been unnecessary and wasteful.
In reply, in relation to the appeal concerning the appellants' representation, the respondents say the appellants were entirely unsuccessful and that the appellant's claim for "75% of the costs on this issue is as bold as it is far-fetched". As to special circumstances, the respondents say the submissions of the appellants are unsubstantiated, "without any reference to the respondents' submissions or particular paragraphs of the Appeal Panel's decision".
As to the claim for costs in respect to the respondents' representation, the respondents submit that the appellants again ignore the fact that the appeal was "substantially unsuccessful".
The respondents submit that the appellants simply criticise the Appeal Panel's decision and gloss over the fact that their success arose because "the Appeal Panel imposed a condition on the Sixth Respondent for which [the appellants] did not contend".
As to special circumstances, the respondents disputed that there was any obvious need to refer to a general meeting the appointment of Clyde & Co as the lawyers for the Owners Corporation, and said that the appellants had not contended that such a condition should be imposed. As to what might be considered "unnecessary" or "wasteful" the respondent submitted that "the true cause of those costs is plainly the appellants' decision to advance 16 Grounds of Appeal in circumstances where only one of those grounds found prime importance at the hearing".
In short, the respondents said the appellants were unsuccessful and that a costs order should be made in favour of the respondents

Submissions - Respondents' costs application

The respondents seek a lump sum order for costs of the appeal in the sum of $31,887. They rely on an affidavit of Stephen Michael Morrissey, affirmed 7 June 2018, in support of that application. Alternatively, they seek an order that the appellants pay the costs of the respondents in the appeal, as agreed or assessed on an ordinary basis.
In support of their application for costs, the respondents submitted that there were special circumstances, warranting an award for costs, which were as follows: 1. The appellants advanced 18 grounds of appeal, of which 2 were abandoned. 2. The respondents were required to spend significant time and money responding to the remaining 16 Grounds. 3. At the hearing of the appeal only one ground, ground 1, was given prime importance. Consequently, the appellants unnecessarily disadvantaged the respondents by the manner in which they conducted their appeal. 4. In conducting the appeal in the way that they did, the appellants failed to comply with the duty imposed upon them under s 36(3) of the NCAT Act. 5. The proceedings were complex in nature involving a consideration of conflict of interest and confidentiality within the context of the common law and the statutory framework. These issues were out of the ordinary. This is illustrated by the fact that the jurisdiction to restrain a solicitor from "switching sides" is "exceptional". 6. A costs order in respect of these proceedings "may deter future practitioners from "switching sides" (and refusing to acknowledge that fact in favour of time-consuming and costly interlocutory litigation), which may in turn assist in the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice.
As to the partial success of the appellants, the respondents say that the principles in Elite Protective Personnel Pty Ltd & Anor v Salmon (No 2) [2007] NSWCA 373 apply. Further, the respondents note that the appellants did not intend for the conditional order made by the Appeal Panel in respect of the Sixth Respondent.
Finally, referring to the decision of 203 Castlereagh Street Pty Ltd v Skybloo Holdings Pty Ltd [2017] NSWCATAP 29, the respondents said that a fixed costs order should be made having regard to the likely length and complexity of the assessment process, the additional cost likely to be involved in that assessment process, and the conduct of the appellants being a significant contributor to the costs of the proceedings.
In reply, the appellants categorise the claim for costs as being one by an insurer to recover costs for which the respondents are not liable. The appellants submitted that the "costs are an amount which the insurer has incurred voluntarily, in electing to defend a Claim".
The appellants say that the respondents' description of the appeal is simplistic and that the respondents' submissions ignore the fact that the most time was spent before and at the hearing on issues about which the respondents were unsuccessful.
In connection with the number of grounds of appeal, the appellants say that the respondents do not explain why the level of particularity provided was excessive or unreasonable. Insofar as two grounds were withdrawn, the appellants say this was both appropriate and unexceptional and that these grounds were minor.
As to the other matters raised on appeal, these did not complicate or protract the proceedings. In relation to the submission that the legal issues raised were complex, the respondents said that the principles of law were well established even though it was necessary for the lawyers to refer to relevant authorities. The fact that the proper administration of justice might give rise to intervention of a court or tribunal in determining who might represent a party in exceptional circumstances does not mean that the proceedings themselves were out of the ordinary or complex in nature.
In relation to the submission concerning an award of costs to "deter other practitioners", this is an irrelevant consideration in the proper exercise of discretion under s 60 of the NCAT Act in considering whether or not there are special circumstances warranting an award of costs. As to the conduct of the appellants and their solicitor, the appellants submitted that it was "not so heinous or unconscionable as to make an order for costs unavoidable". Here, the appellants again reiterated that the respondents had failed to establish a conflict of interest or that there was relevant confidential information or that there was a possibility of Mr Le Page being a material witness.
In relation to the application for a fixed cost award, the appellants referred to 283 Castlereagh Street at [40] and said that a tribunal would not generally be encouraged to carry out the work of the costs assessor, the costs in the present case are not modest, and there are no other circumstances that would otherwise warrant the making of a fixed cost award.
In reply, the respondents submitted that orders in connection with costs where an insurer is involved are made on a regular basis. The respondents refer to the appellants' submissions on this aspect and say that they exhibit "a fundamental misunderstanding of insurance concepts", that they are "extraordinary and misconceived", and are "incorrect and misleading". Further, the respondents say that the submissions are in any event irrelevant in the context of the Tribunal exercising a power under s 60 of the NCAT Act.
As to special circumstances, the respondents referred to the 16 grounds of appeal that were pursued and say that "work was ultimately unnecessary and could have been avoided but for the appellants' scattergun approach to the appeal up until the hearing". The respondents restate their position concerning the application of s 36(3) of the NCAT Act.
The respondents then submitted that where the "Tribunal felt compelled to exercise its 'exceptional' jurisdiction to deprive a litigant of the lawyer of his or choice [sic] the purpose of the proper administration of justice is of a special nature".
In relation to the submissions concerning a fixed costs order, the respondents assert that the appellants' response in resisting such an order is to "seek to unnecessarily delay, obfuscate or complicate matters". Otherwise, the respondents make further reference to the affidavit of Mr Morrissey.

Consideration

Both parties accepted that s 60 of the NCAT Act applies. That is to say that each party is to pay their own costs of the appeal proceedings (s 60(1)). The Tribunal may, however, award costs in relation to the proceedings before it if it is satisfied that there are special circumstances warranting an award of costs (s 60(2)).
"Special circumstances" means circumstances which are out of the ordinary: see eg Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]. Some factors to which the Appeal Panel may have regard, in determining whether or not special circumstances exist, are set out in s 60(3) of the NCAT Act.
It is necessary to examine the claims made in these proceedings, the manner in which they were conducted and the submissions made by the parties to determine whether special circumstances exist. If so, the Appeal Panel must also consider whether or not discretion should be exercised in favour of either party to make an award of costs and/or the terms of such an order.
This appeal involved a challenge to an interlocutory decision concerning applications, made by each of the parties to the proceedings at first instance, to be legally represented. We do not propose to reiterate what we said in the Principal Reasons as to why we made the orders on 31 May 2018.
Relevant to the present application is the fact that we granted leave to appeal an interlocutory decision. This is not something done as a matter of course, having regard to the principles to which we referred when leave to appeal might be granted. We said at [77] of the Principal Reasons: "In our view, leave should be granted. As far as we are aware, the appeal raises matters of principle on issues not previously considered by the Appeal Panel in respect of leave for legal representation in proceedings at first instance. Further, for the reasons that follow, we are also satisfied there is a relevant injustice which should be corrected."
The matters of principles to which we referred at [77] related to the grant of leave for a party to be legally represented, the discretion to be exercised under s 45 of the NCAT Act, and the applicability of common law principles applied by the Court in restraining legal practitioners from acting in circumstances of conflict, breach of fiduciary obligations, or where the proper administration of justice requires a restraining order to be made.
However, in the end (and leaving aside the matters the subject of the Bhardwaj application), there was little conflict about the applicable legal principles: Principal Reasons at [93].
Rather, in substance, the dispute in the appeal concerned: 1. whether as a matter of fact there was a conflict, confidential information which needed to be protected, a continuing fiduciary obligation being owed by a former solicitor of the Owners Corporation; and 2. whether the proper administration of justice made it appropriate to prevent a particular practitioner or law firm from acting and/or whether in the case of the Owners Corporation, the appointment of a common lawyer to that of the strata committee members should be made by the Owners Corporation in general meeting and not by the strata committee members who were being sued in connection with carrying out their committee functions.
The question is whether, in this context, there are special circumstances so as to permit the Appeal Panel to exercise its discretion to make an award of costs.
We have reached the view that special circumstances are not established for the following reasons: 1. The fact that leave to appeal was granted does not make this case out of the ordinary. As we stated at [77], the Appeal Panel had not previously considered the principles applicable in granting leave to lawyers who had previously acted for other parties. However, the legal principles were not ultimately in contest, the issues being issues of fact and what orders were required in the exercise of a discretion having regard to the proper administration of justice. 2. There was no legal or factual complexity that might make this case out of the ordinary. While there were different views of the facts, and different submissions concerning the application of the law to those facts, this is unremarkable. Also unremarkable is that Lot owners are at "loggerheads", the present dispute having a long history concerning works required to be carried out to various Lots and common property: Principal Reasons at [149]. These observations might also be made of the respective lawyers, whose language in submissions was, at times, florid and somewhat unnecessary. 3. The appeal was dealt with in ordinary timeframes, the hearing of the appeal not taking up excessive time. The parties provided documents by way of bundles and written submissions in the usual way, the appeal having been lodged on 19 February 2018, heard on 4 April 2018 and a decision and reasons published on 31 May 2018. 4. While the grounds of appeal were lengthy, and two were abandoned, it could not be said that the appellants have been responsible for prolonging unreasonably the time taken to complete the proceedings. Similarly, it could not be said that the respondents' conduct prolonged the proceedings or in any relevant sense adversely affected their efficient resolution. 5. The fact that we concluded: 1. that the proper administration of justice justified the decision made by the Tribunal in connection with representation of the appellants by Le Page Lawyers and Mr Le Page; and 2. that it was appropriate to impose a condition to ensure that the Owners Corporation determined in general meeting whether there is any divergence in interests warranting the appointment of lawyers separate to those of the strata committee are not themselves circumstances out of the ordinary when one considers disputes that arise under the Strata Schemes Management Act 2015 (NSW). Rather, it is to be expected that some Lot owners will take different views as to their rights and what may properly be done in respect of their property and in the administration of strata schemes.
In relation to the submission by the respondents that a costs order may "deter future practitioners from 'switching sides'", save in the case of proven misconduct or conduct which might otherwise fall within the categories specified in s 60(3) of the NCAT Act and constitute special circumstances, in our view any decision to award costs is not to be made for the purpose of deterrence. As the authorities make clear, an award for costs is to compensate a party for costs which that party has incurred, rather than to punish the opposing party: see Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 per Mason CJ at 543 and McHugh J at 567, and Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 per Brennan CJ at 75.
Finally, the parties' representatives sought to characterise various claims and submissions made by their opponents, using language which was unnecessarily critical and to some extent uninformative of the issues to be resolved. While this approach might be regarded as a failure to comply with a duty imposed under s 36(3), we are not satisfied that this factor makes the present case out of the ordinary.
It follows that we are not satisfied that special circumstances are established. Consequently, the power to make an award for costs in the present case is not enlivened.
Further, even if we are wrong in relation to this conclusion, we would not be inclined to make an order for costs in any event.
In the Principal Reasons at [155] we indicated that "the appellants have only been partly successful". This is obvious from the orders which we made.
Each of the parties seeks to dissect the issues in the present case in order to persuade the Appeal Panel that an order based on issues or relative success should be made in the present case. The power to make a costs order based on issues is clear: see eg Elite Protective Personnel at [7] and Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38].
However, in our view, it is inappropriate in the present case to dissect the issues in the way the parties contended. This appeal involved the identification of the applicable legal principles, a matter not ultimately in contest, a review of the interactions between Mr Le Page and his firm, the Owners Corporation and the strata committee and a consideration of the facts concerning who had engaged which legal practitioner and when. In reviewing the Tribunal's decision, the Appeal Panel was required to consider these facts and apply the relevant legal principles.
Each of the parties had some success about each of these issues. Seeking to apportion the relative success is unproductive and, in any event, we are not satisfied either party should be entitled to costs having regard to the decision we made.
For these reasons, no order for costs should be made in connection with the substantive appeal.
Finally, in relation to the respondents' application for costs in connection with the Bhardwaj application, we are satisfied in this case that the nature of the application is out of the ordinary and is a matter which may be taken into account in accordance with s 60(3)(d) of the NCAT Act.
Despite directions made by the Appeal Panel, no precise orders were articulated by the appellants concerning the Bhardwaj application. Whilst there was an application for the Appeal Panel to determine the unresolved issues, no orders as a consequence of the determination were articulated and, in that sense, there was a breach of s 36(3) of the NCAT Act, which is a factor that may be considered under s 60(3)(f) of the NCAT Act. Further still, and in our view importantly, the Bhardwaj application had the consequence of prolonging the proceedings in that the respondents were required to again consider the issues raised by the appellants in the appeal, in circumstances where final orders had already been made. The appellants failed in that application. Any challenge to the Principal Reasons must be made by way of appeal, or as otherwise permitted, to a court.
Consequently, an order should be made for the appellants to pay the respondents' costs, as agreed or assessed on an ordinary basis, in respect of the application contained in the Le Page Letter.

Orders

The Appeal Panel makes the following orders: 1. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW), hearings are dispensed with in relation to each party's cost application and in respect of the appellants' application made by the letter to the Tribunal from Le Page Lawyers letter dated 6 June 2018. 2. The application that the Tribunal proceed to reopen its decision made 31 May 2018 is dismissed. 3. The appellants are to pay the costs of the respondents, as agreed or assessed on an ordinary basis, in respect of the application contained in the letter to the Tribunal from Le Page Lawyers dated 6 June 2018 4. Save as provided in order 3, all applications for costs are 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: 03 August 2018

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