Sarkees v Commissioner for Fair Trading

Background

1. The Applicant has held a certificate of registration or a licence under the Act since April 2006. In 2018 she was issued a real estate agent licence under the Act. In March 2020 she was issued a Class 2 real estate agent licence and in September 2021 she was issued a Class 1 real estate agent licence. The Class 1 real estate agent, which expired in September 2022, authorised her to carry on a business and be in charge of that business.
2. Her application to renew the licence was refused on the basis that she was not "fit and proper" to hold a licence. This view was related to the Applicant being charged under section 93T(1) of the Crimes Act 1900. The charge was that the Applicant had participated in a "criminal group and or reasonably to have known that it was a criminal group and her participation in that group contributed to criminal activity".
3. It was not alleged that the Applicant knew of any criminal activity or that she knowingly participated in any criminal activity.
4. The elements of the offence are that: 1. the Applicant ought reasonably to have known there was a criminal group; and 2. the Applicant ought reasonably to have known that her participation contributed to the occurrence of criminal activity.
5. The Applicant entered a guilty plea to the charge, and the Local Court dismissed the charge without conviction under section 14 of the Mental Health and Cognitive Impairment Forensic Provisions Act 2020. As the charge was dismissed, there was no finding that the charge was proven.
6. The charge, and the Applicant's admission to the elements of the offence, were considerations in the Respondent's decision that she was not "fit and proper" to hold a licence.

The Issue for determination

1. The Applicant seeks an order for costs. The issue for determination is whether the circumstances in this matter are of a sufficiently special nature such as to warrant the awarding of costs.

Relevant Law

1. Section 50(2) of the CAT Act, provides that: The Tribunal may make an order dispensing with a hearing if it is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Tribunal.
2. The parties have agreed to me determining costs on the papers. As I am satisfied that the issue of costs can be adequately determined in the absence of the parties by considering their written submissions, I dispense with a hearing.
3. Section 60 of the CAT Act sets out the provisions governing costs in Tribunal proceedings: 60 Costs (1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following - (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36(3), (g) any other matter that the Tribunal considers relevant. (4) If costs are to be awarded by the Tribunal, the Tribunal may - (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis. (5) In this section - costs includes - (a) the costs of, or incidental to, proceedings in the Tribunal, and (b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal.
4. The matters set out in section 60(3) are not exhaustive. As noted in section 60(3)(g), the Tribunal may have regard to any other matter that it considers relevant.
5. The Appeal Panel of the Tribunal has considered on many occasions the applicable principles as to whether there are "special circumstances" to justify a costs order in favour of a party. In Grasso v The Owners Strata Plan No. 52399 [2022] NSWCATAP 91 ("Grasso"), the Appeal Panel stated at paragraph [12]: "Certain principles have been established concerning an award of cost as follows:
6. An application for costs can only succeed before the Tribunal if it can be shown that 'the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional.': Santow JA in Cripps v G & M Mawson [2006] NSWCA 84 at [60] in relation to s 88 (1) of the Administrative Decisions Tribunal Act 1997, which, by analogy, is a useful statement applicable in this Tribunal;
7. 'An assessment whether circumstances are "special" involves the exercise of a value judgement carried out by way of comparison between what is not "special", and what is special.': See Alexander James Pty Ltd v Pozetu Pty Ltd (No.2) [2016] NSWCATAP 75 at [14];
8. the nature and complexity of the appeal proceedings is the relevant consideration; not the nature and complexity of the proceedings at first instance: see Sahade v Owners SP No 62022 [2015] NSWATAP 225 at [38];
9. the power to award costs is a discretionary power vested in the decision maker: see Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 62 at 65; [1997] HCA 6;
10. the exercise the discretion requires a tribunal 'to weigh whether those circumstances are sufficient to amount to "special circumstances" that justify departing from the general rule that each party bear its own costs': see The Owners - Strata Plan No 63731 v B&G Trading Pty Ltd (No2) [2020] NSWCATAP 273 at [13];
11. an order for costs is intended to compensate the successful party: it is not intended to be punitive in nature: Oshlak v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72; Hamod v State of New South Wales (2002) 188 ALR 659; [2002] FCA 424; [2002] FCAFC 97; and
12. the discretion to award costs is to be exercised judicially: Nguyen v Perpetual Trustee Co Ltd [2015] NSWCATAP 264 at [94]."
13. In The Owners-Strata Plan No 53865 v JPG Investments Pty Ltd (No 2) [2024] NSWCATAP 67 the Appeal Panel provided additional comments at paragraph [19]: Applicable principles are discussed in The Owners-Strata Plan No 63731 v B & G Trading Pty Ltd (No 2) [2020] NSWCATAP 273 at [6]-[15]) as follows (footnotes omitted): "The general rule set out in s 60(1) was: "… designed to promote access to justice generally and to minimise the overall level of costs in tribunal proceedings as far as is practicable: Choi v University of Technology Sydney [2020] NSWCATAP 18 at [41]. [1] In Feng v OzWood (Australia) Pty Ltd [2020] NSWCATAP 42 the Appeal Panel said, at [8], that the discretion to award costs had to be exercised judicially: "...having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs. (See eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [23]-[31]; Nguyen & Anor v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen & Anor (no 2) [2016] NSWCATAP 168 at [16].)" Section 60(2) says that the Appeal Panel may award costs to a party "only if" satisfied there are special circumstances warranting an award of costs. Section 60(3) sets out a non-exclusionary list of factors to which an Appeal Panel may have regard in determining whether special circumstances warranting an award of costs exist. "Special circumstances" are circumstances that are out of the ordinary, but need not be those which are exceptional or extraordinary: Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 at [60] (Santow J); Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [32]; Commissioner for Fair Trading v Edward Lees Imports Pty Ltd (No 2) [2019] NSWCATAP 222 at [8]; Edwards v Commissioner for Fair Trading, Department of Customer Service (Costs) [2019] NSWCATAP 249 at [9]; Youssef v NSW Legal Services Commissioner (Costs) [2020] NSWCATOD 115 at [107]. However, it does not follow that a costs order should be made simply because one or more of the factors in s 60(3) are made out. Even if satisfied that there are special circumstances, the Appeal Panel must further be satisfied that they are circumstances "warranting an award of costs" - Fitzpatrick Investments Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 103 at [21]; Youssef at [108]. The exercise of the discretion requires the Tribunal "to weigh whether those circumstances are sufficient to amount to 'special' circumstances that justify departing from the general rule that each party bear their own costs": BPU v New South Wales Trustee and Guardian (Costs) [2016] NSWCATAP 87 at [9]; Obieta v Australian College of Professionals Pty Ltd (2014) NSWCATAP 38 at [81]; Khalafv Commissioner of Police [2019] NSWCATOD 178 at [29]; Alliance Motor Auctions Pty Ltd v Saman [2018] NSWCATAP 137 at [35]. He who asserts must prove, and so the party seeking the costs order bears the onus of proving that special circumstances exist - Styles v Wollondilly Shire Council [2017] NSWCATAP 108 at [5] under the heading "Costs". Whether special circumstances exist is a question of fact and each case must be assessed according to its circumstances: Wynne Avenue Property Ltd v MJHQ Pty Ltd (No 2) [2019] NSWCATAP 68 at [57]; The Owners - Strata Plan 20211 v Rosenthal [2019J NSWCATAP 49 at [15]."
14. The Appeal Panel decisions in Grasso and The Owners-Strata Plan No 63731 v B & G Trading Pty Ltd (No 2) have been followed in a number of decisions of this Tribunal. These principles were considered recently by Senior Member Titterton in Agha v Commissioner for Fair Trading [2024] NSWCATOD 182 ("Agha"). Agha was also a matter brought under the Property Stock and Agents Act 2002.

The Applicant's case.

1. The Applicant seeks an order reimbursing her for the legal costs relating to preparation of and appearance at the hearing.
2. She says that because of the Respondent's incorrect findings at the internal review stage, she had to seek external review in the Tribunal. Further, appreciating the importance of the application, she retained solicitors and counsel.
3. She says that the internal reviewer refused the licence application on the ground that she was not "fit and proper" to hold a licence and that the sole basis for the decision of not being "fit and proper" was the charge in the Local Court. She noted that the decision maker stated: "In considering Ms Sarkees' fitness and propriety under the PSA Act, I have taken into account that the charge, Participate criminal group contribute criminal activity, was dismissed. However, I have balanced this with the fact that section 14(2) of the Mental Health and Cognitive Impairment Forensic Provisions Act 2020 provides that an order to dismiss a charge against a defendant does not constitute a finding that the charge against the defendant is proven or otherwise. Therefore, Ms Sarkees' admission to the elements of the offence is significant and relevant to consideration concerning her fitness to hold a property licence. It is also evident that the fraud perpetrated by Ms Sarkees and others in the group represents a substantial sum, as well as serious abuse of a NSW Government program intended to assist landlords and tenants"
4. She further contends that the issue in the substantive proceedings was always that the Respondent had misunderstood the elements of the offence and what in fact she had admitted. She says that she provided no new evidence at the hearing.
5. The Applicant contends that the Respondent misunderstood the elements of the offence. She denied that she had made any admissions as to fraud. She repeatedly denied participating in any of the offending conduct or knowing about it. She submits that the Respondent was ultimately relying on allegations tantamount to fraud and that its evidence was fundamentally lacking in probative value and would never have met the standard or state of satisfaction required to be met. It did not summons any objective material in support of its position and its evidence was fundamentally lacking in substance.
6. She submits that the proceedings had no tenable basis. The evidence of the Respondent lacked any possibility of proving the allegations it sought to prove and so the proceedings lacked substance.
7. The Applicant submits that costs are warranted because at every stage in the administrative decision making process, the Respondent has made fundamental errors to her detriment. She says that her detriment does not simply relate to the costs of retaining legal representation for the Tribunal but included not having work since she applied for her licence in November 2023, the impact of that on her career; the impact of it on her reputation and being an unemployed single mother.

The Respondent's case.

1. The Respondent's position is that the application for costs should be dismissed.
2. The Respondent provided a response to the various aspects of the Applicant's arguments in support of her costs application:

Criticisms of the internal review decision

1. The Respondent submits that the Tribunal does not have jurisdiction under section 60 of the CAT Act to make a costs order on the basis of alleged deficiencies in an internal review decision. The Tribunal may only award costs "in relation to proceedings", not in relation to internal review decisions.
2. The Respondent noted that only a limited amount of information was available to the internal reviewer and submits that, on the material before the internal reviewer, there was no `fundamental" misunderstanding as to the facts as is asserted by the Applicant.
3. The Respondent disputed the Applicant's assertion that the fact of the charge was the "sole basis" for the internal reviewer's finding. The Respondent submits that the internal reviewer considered: 1. the broader circumstances of six charges; 2. the plea of guilty, and therefore the admission, to the elements of one offence to which there was a plea of guilty; 3. that the Applicant's involvement occurred when she was a licence-holder and in the context of her employment in respect to which she was a licence-holder; and 4. the financial value of the alleged activity of the group ($328,000 obtained and a further $400,500 sought).
4. The Respondent submits it is plainly not correct and is otherwise inconsistent with the principles concerning fitness and propriety, to suggest that the internal reviewer's "sole basis" for the finding concerning that matter was the fact of the charge.

Availability of certain evidence prior to hearing, which should have been accepted on its face by the Respondent and not ventilated or tested at a hearing.

1. The Respondent disputed the relevance of the Applicant's assertion that content of the Agreed Facts was available prior to the application to the Tribunal and that she had made clear statements in her signed written statements. The Respondent does not accept that: 1. all relevant evidence was before the Tribunal prior to the conclusion of the hearing. 2. an oral hearing involving the testing of an Applicant's evidence serves no forensic or administrative purpose. 3. a party is required to accept another party's evidence on its face and has no entitlement to test that evidence.

Was all relevant evidence before the Tribunal prior to the conclusion of the hearing?

1. The Respondent submits that not all relevant evidence was before the Tribunal prior to the conclusion of the hearing. It says that: 1. the Applicant provided some oral evidence. 2. the Applicant was asked questions by the Respondent. 3. Mr Romeo, one of the Applicant's character referees and a potential future employer, was asked questions by the Respondent.

Did an oral hearing involving the testing of the Applicant's evidence serve a forensic or administrative purpose?

1. The Respondent submits that the Applicant's evidence amounted to little more than fairly bald statements and was devoid of the detail which might have addressed the matters contained in the Agreed Facts. Further, the Applicant's evidence was set out in statements, and was not sworn or affirmed. Similarly, none of the "character references" or "letters of support" was set out in affidavit form.
2. The Respondent noted that the Applicant had pleaded guilty to the element that she "ought reasonably to have known" certain things. The Respondent was entitled to explore with the Applicant in cross-examination, matters relevant to an assessment of what the Applicant knew or ought reasonably to have known or could have known. In so doing the Respondent was able to elicit more detailed evidence than was recorded in her statements. Detail that was elicited from the Applicant in cross-examination was directly relevant to an assessment of the limited evidence the Applicant had given in her unsworn statement. These matters were directly relevant to an assessment of her credibility and credit and to her fitness and propriety.
3. The Respondent noted that in its administrative review jurisdiction, the Tribunal stands in the shoes of the administrator and independently exercises all the powers of the administrator for the purposes of determining the application for administrative review. The purpose of the administrative review process is to secure an external, independent hearing de novo of the administrative application. The Tribunal has the benefit of hearing from witnesses and interrogating the evidence in a manner not usually available to the administrator.
4. The Respondent submits that there is no principle of law or logic which dictates that the mere service of evidence requires acceptance by the receiving party of the content of that evidence.

Did the Respondent bear a particular forensic "burden" or seek to "prove" certain matters, so that the "proceedings lacked any tenable basis"?

1. The Respondent asserts that it did not allege criminal conduct or undertake to prove any criminal conduct.
2. The Respondent submits that the Applicant appears to misunderstand the nature of administrative review proceedings and as to the matters that the Respondent identified as being relevant to an assessment of the Applicant's fitness and propriety.
3. Proceedings in the Tribunal are administrative in nature, or inquisitorial, and not adversarial. As a matter of well-established law, the Respondent does not bear any relevant legal burden of proof.

The Respondent continued at the hearing to operate under certain "misunderstandings" as to the elements of an offence under s 93T of the Crimes Act and the terms of the applicant's admissions so the "proceedings lacked substance".

1. The Respondent denies that it operated under any of the alleged misunderstandings at any stage of the proceedings. It further submits that the Applicant has made no attempt to furnish any particulars of the Respondent's alleged misunderstanding.

Discussion

1. As noted above, an application for costs can only succeed before the Tribunal if it can be shown that there are "special circumstances" to justify a costs order. It must be shown that the circumstances are out of the ordinary. The applicable principles as to whether there are "special circumstances" to justify a costs order in favour of a party are well established.
2. In the present matter, the Applicant has alleged that she had no option but to seek review in the Tribunal because of the internal reviewer's decision. However, as the Respondent has correctly identified, the Tribunal may only award costs "in relation to proceedings". It does not have jurisdiction under section 60 of the CAT Act to make a costs order in relation to an internal review decision. The application must fail insofar as it relates to matters that are not in relation to proceedings before the Tribunal.
3. I have set out above the relevant considerations in section 60(3) of the CAT Act. It seems that the Applicant is primarily relying on subsections 60(3)(c) and 60(3)(e) of the NCAT Act. That is: (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, … (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,
4. In the circumstances of this matter, I am not satisfied that the circumstances are out of the ordinary in relation to either of those considerations. I agree with the arguments presented by the Respondent with respect to the position it adopted in responding to the application brought by the Applicant.
5. As noted, there was no formal burden of proof. In considering an application for administrative review, the Tribunal may have regard to any relevant material before it at the time of its review. Its consideration is not limited to material that was before the Respondent at the time it made the decision which is under review.
6. I agree that the Respondent was entitled to explore issues related to the Applicant's fitness and propriety and was under no obligation to accept the Applicant's evidence at face value. I do not agree with the Applicant that no additional evidence was presented at the hearing. Further, I do not accept that there was no forensic or administrative purpose in testing of the Applicant's evidence. Evidence was given by both the Applicant and Mr Joe Romeo. Both were cross-examined and the answers that they provided were relevant to the final determination.
7. Section 60(3)(g) permits the Tribunal to into account any other matter that the Tribunal considers relevant. In the circumstances of this matter, I do not consider that there are other relevant considerations that would warrant an award of costs.
8. Even if the considerations identified by the Applicant do amount to special circumstances, I must be satisfied that they are circumstances "warranting an award of costs". I am not satisfied that is the situation in the circumstances of this matter.
9. I am in general agreement with the Respondent in relation to the issue of costs in this matter. In my view, the circumstances are not out of the ordinary. I am not satisfied that there are special circumstances that justify departing from the general rule that each party bear its own costs. Accordingly, it is my view that the application for costs should be dismissed, and the parties should pay their own costs of the application.

Order

1. An oral hearing on the issue of costs is dispensed with under section 50(2) of the Civil and Administrative Tribunal Act 2013.
2. The Applicant's application for costs is dismissed.

I hereby certify that this is a true and accurate record of the reasons for Decision of the New South Wales Civil and Administrative Tribunal. Registrar 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: 29 November 2024