SHH Ltd v City of Parramatta Council; SHH Ltd v City of Parramatta Council

NCAT Appeal Panel|2019-09-16

REASONS FOR DECISION

By decision published on 28 May 2019 appeals by SHH Ltd (the appellant) against two decisions of the Tribunal were mostly dismissed: see SHH Ltd v City of Parramatta Council; SHH Ltd v City of Parramatta Council [2019] NSWCATAP 131.
In respect of AP 19/11824 the Appeal Panel directed that an order for costs made in proceedings GEN 18/09402 be varied so as to read: "2. SHH Ltd must pay the City of Parramatta Council's costs of and incidental to these proceedings on the ordinary basis, such costs if not agreed 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, and not to exceed $5000."
In respect of AP 19/07450 and in respect of AP 19/11824, the Tribunal made the following costs orders: "5. Any application in respect of the costs of either appeal to be made by written submissions filed and served within 14 days of the date of publication of this decision. Such submissions should address the question whether the application for costs can be dealt with on the papers and without a hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act. 6. If any party files submissions in accordance with order 5 above the other parties may file and serve submissions in response within a further 14 days. Such submissions should address the question whether the application for costs can be dealt with on the papers and without a hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act."

Council's submissions

In accordance with the orders of the Tribunal the respondent ("the Council") has made an application for its costs. The Council submits that the appeal raised no new issues for determination which had not already been determined at the original hearing; that the claims at first instance and the appeals had no tenable basis in fact or law; that the Tribunal at first instance made findings that aspects of the appellant's claim were "obviously untenable and had no prospects of success" and that the appeal involved "little more than a repetition of its cases at first instance, and so suffered from the same deficiency, which the appellant made little or no attempt to address in the appeal proceedings".
The Council submits that subject to a narrow issue concerning the application of the costs cap in GEN 1809402 (which was determined in AP 19/11824), the appellant had no prospects of success in either of its appeals. Further, the Council submits that the submissions for the appellant were repetitive, unclear, prolix, confusing and poorly expressed and did nothing more than reargue the case unsuccessfully brought at first instance. The Council submits that this was so "even when allowance is made for the appellant's representative's professed difficulties with the English language", and that as a consequence the Council was unreasonably and unnecessarily disadvantaged in responding to the appellant's case because the issues raised were more complex than they needed to be.
Further, the Council seeks an order that the appellant should pay the costs of the Council of the appeal on indemnity basis from and including 27 April 2019, arising from the facts which follow.
The Council states that offers were made to settle the proceedings by correspondence. The appellant, by letter dated 8 April 2019, proposed to settle the proceedings upon payment to it by the Council of the amount of $400,000. There is no quantification of how that amount was calculated. On 17 April 2019 the Council rejected the appellant's offer and instead made a counter offer of a payment by the Council to the appellant of $10,000, with the Council waiving its right to enforce a costs order in its favour in proceedings GEN 18/09402, and the appeal proceedings being dismissed with no order as to costs. The offer was expressed to be open for acceptance until 26 April 2019. That offer was not accepted by the appellant, which countered on 23 April 2019 with an offer to accept payment by the Council to the appellant of $325,000. On 3 May 2019, the Council rejected that offer.
The Council submits that its offer of 17 April was a genuine offer made in an endeavour to compromise in the proceedings; that the appellant's offers to accept the payment of $400,000, and the subsequent amount of $325,000, were made without any basis for calculation; and that had the appellant accepted the Council's offer made on 17 April, the appellant would have received the amount of $10,000 and the Council would have waived its costs in proceedings GEN 18/09402.
On 29 May 2019, following delivery of the decision in the appeal, the appellant invited the Council to review its decision not to accept the appellant's settlement offer of 23 April 2019. On 3 June 2019 the Council declined to review its decision but made an offer to resolve the question of costs in proceedings GEN 18/09402 on terms including fixing the Council's costs in those proceedings at $5,000 in accordance with order 4 made by the Appeal Panel in proceedings AP 19/11824; and fixing the Council's costs of the appeal proceedings at $25,000 (which the Council asserted represented a compromise of approximately $11,000 on the Council's actual costs of the appeal proceedings, said to have been $36,004.38 as at the date of the offer). On 3 June 2019 the appellant sought clarification of the Council's offer, which was provided on 4 June 2019. The Council submits that the 3 June costs offer was a genuine offer of compromise and that the appellant's failure to accept that offer was unreasonable.
Further, the Council submits that it has made several efforts in the proceedings on a without prejudice basis to resolve the differences between the parties and to avoid the expense, delay and aggravation involved in protracted litigation. It states that the Council did not seek a costs order at first instance in COM 18/44348 or COM 18/44358 in view of the fact that the Council had already received an order in its favour in proceedings number GEN 18/09402 and the Council considered that the financial circumstances of the appellant indicated that the expenditure required to seek and enforce any further costs orders would outweigh the cost of recovery from the appellant.
In respect of the costs order in proceedings GEN 18/09402, the Council submits that in accordance with the orders of Senior Member Goldstein of 19 October 2018, the Council had proceeded to a cost assessment. The costs sought by the Council were $29,422.90 excluding GST. The cost assessment was completed on 26 April 2019. In supplementary submissions dated 17 June 2019 the Council states that the costs determination by the Supreme Court of New South Wales assessed the total amount of costs payable by the appellant to the Council in GEN 18/09402 at the amount of $24,366.12. Further, the Council submits that if the costs of proceedings in GEN 18/09402 must be assessed a second time as a consequence of the Appeal Panel's decision in the proceedings, the Council would be adjudged entitled to recover an amount greater than $5,000. The Council submits it would be burdensome to compel the parties to re-agitate the cost assessment. Instead, the Council seeks an order that the Tribunal make a fixed costs order in GEN 18/09402 in the amount of $5,000.
For these reasons the Council submits that the Tribunal should order as follows: 1. that the appellant should pay the Council's costs of the appeals, fixed at $28,000; 2. if the Tribunal is not minded to make a fixed costs order in respect of the appeals, the appellant should pay the Council's costs of the appeals as agreed or assessed on the ordinary basis until 26 April 2019 and on an indemnity basis thereafter pursuant to s 60(4)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) ("NCAT Act"); 3. if the Tribunal is not minded to make an indemnity costs order in the appeals, the Council should receive its costs of the appeals on the ordinary basis, as agreed or assessed; and 4. in proceedings GEN 18/09402, the costs be fixed at $5,000.

Appellant's submissions

On or about 4 June 2019, the appellant filed a document entitled "Application for miscellaneous matters" in respect of both appeals ("the Further Application"). The Further Application seeks to re-agitate issues which have already been the subject of determination by the Appeal Panel. The appellant claims that participation in mediation to resolve the dispute was a prerequisite to the commencement of litigation and the appellant seeks compensation for what it claims was damage done to it as a consequence of the Council's refusal to mediate.
The Appeal Panel considers that the Further Application seeks to re-agitate issues which have already been determined in the appeals, and accordingly will take no action in relation to the Further Application.
The appellant has also filed a number of other documents: 1. A copy of an order made on 6 May 2019 refusing an application for adjournment and confirming that the hearing of the appeal would proceed on 9 May 2019. No submissions are made with respect to such order. 2. A letter addressed to it by the Council dated 24 July 2017 which responds to various complaints made by the appellant against the Council and suggests a without prejudice negotiation to be held in the week commencing Monday 31 July 2017. 3. Correspondence from the Dispute Resolution Unit, Office of the NSW Small Business Commissioner dated 20 November 2018 concerning the Councils declining to participate in mediation in view of the pending NCAT proceedings. 4. An email dated 5 July 2019 from the director of the appellant to the NCAT Registry concerning the rejection of an application. It is not entirely clear what application is being referred to but it would appear to be the Application for miscellaneous matters referred to above.
The appellant has also advised that its director, Dr Imielska, would not be available from 13 August 2019 to 22 September 2019. Dr Imielska requested that the Appeal Panel set aside its decision made on 28 May 2019 and excuse the members presiding from any further decision-making in respect of the costs order. Dr Imielska made other allegations which have no relevance to the determination of the issues of costs which we are now determining and need not be further considered.
The appellant recites arguments raised before the Appeal Panel relating to the refusal of the Council to participate in mediation and that the Council's conduct constitutes bullying; that attempts to mediate before the NSW Small Business Commissioner were refused by the Council; that there has been arrogant and unacceptable behaviour by the Tribunal member at the hearing at first instance; that the Pop Up agreement made between the parties which governed the parties' relationship in respect of the licence granted by the Council to the appellant contains a dispute resolution clause, namely clause 28 which should have been utilised; that the Council locked out the appellant; that clause 28 of the contract survives the Council's termination of the contract; that the appellant fully complied with the agreement with the Council under the Pop Up agreement; that the Council's conduct constitutes racial discrimination; that the Appeal Panel would not be expected to make a corrupt, or partial decision, or would ignore the evidence; that the Council's legal team breached confidentiality of settlement proposals; that the Council's legal representative is unreasonable and that the Council has breached its obligations.
The appellant has provided 60 pages of documentation purportedly in support of its submissions. That documentation has already been referred to and considered by the Appeal Panel in the formulation of its original decision.
The appellant requests that the costs application be assessed by a differently constituted panel and the appellant opposes a decision being made on the papers. The appellant requests that the Appeal Panel strike out the Council's application for costs or make an order that all parties to the proceedings pay their own costs.

Should a hearing be dispensed with?

The Tribunal must decide whether it is appropriate to proceed with the application for costs on the papers and without a hearing.
Section 50 of the NCAT Act relevantly provides: (1) A hearing is required for proceedings in the Tribunal except: (a) in proceedings for the granting of leave for an external or internal appeal, or (b) in connection with the use of any resolution processes in proceedings, or (c) if the Tribunal makes an order under this section dispensing with a hearing, or (d) in such other circumstances as may be prescribed by the procedural rules. (2) 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. (3) The Tribunal may not make an order dispensing with a hearing unless the Tribunal has first: (a) afforded the parties an opportunity to make submissions about the proposed order, and (b) taken any such submissions into account.
The Tribunal has afforded each of the parties an opportunity to make submissions concerning whether a hearing should be dispensed with and has taken those submissions into account.
The appellant has provided no coherent or relevant submissions in relation to costs. The documentation provided and the claims made by the appellant rather are directed to the conduct of the Council's lawyer, the Tribunal, and the conduct of the Council in terminating the sub-licence. The Appeal Panel finds that it is not assisted by the appellant's documentation which in essence seeks to revisit the matters already determined on the appeals.
The Council's submissions go directly to the issue of costs and state the reasons in support of the orders which are sought. Essentially they relate to the lack of merit in the appeal; the conduct of the appellant which seeks to re-litigate the question whether the Council should have participated in a mediation after the termination of the sub-licence agreement; and refer to the orders for costs already made in the proceedings before the Consumer and Commercial Division. The appellant has had the opportunity to read those submissions and had them available for the preparation of its reply submissions.
The Appeal Panel has a discretion to dispense with a hearing if it is satisfied that the issues can be adequately determined in the absence of hearing. The appellant has provided no indication why a hearing should take place. Further, the appellant has not foreshadowed any issue which it seeks to raise which it could not have raised in its written submissions. The Council has, subject to one variation in respect of an existing costs order, been wholly successful in the appeals. In these circumstances, the Tribunal considers that the additional burden of costs in holding a hearing, when no issue has been foreshadowed or identified in the appellant's submissions, is not justified. Accordingly we make an order pursuant to s 50(2) of the NCAT Act dispensing with a hearing in relation to questions of costs and will proceed to determine the issue of costs by reference to the parties' written submissions and without a further hearing.

Costs principles

Section 60 of the NCAT Act provides: 60 Costs (1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3), (g) any other matter that the Tribunal considers relevant. (4) If costs are to be awarded by the Tribunal, the Tribunal may: (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis. (5) In this section: costs includes: (a) the costs of, or incidental to, proceedings in the Tribunal, and (b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal.
Rules 38 and 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) ("the Rules") provide: 38 Costs in Consumer and Commercial Division of the Tribunal (1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal. (2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if: (a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10 (2) of Schedule 4 to the Act in relation to the proceedings, or (b) the amount claimed or in dispute in the proceedings is more than $30,000. 38A Costs in internal appeals (1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of: (a) enabling legislation, or (b) the Division Schedule for the Division of the Tribunal concerned, or (c) the procedural rules. (2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.
The appeals before this Tribunal were internal appeals and were lodged on or after 1 January 2016.
Each proceeding at first instance related to the alleged wrongful termination by the Council of a licence agreement known as the "Pop Up Parramatta" agreement. Applications COM 18/44348 and COM 18/44358 were essentially for relief against the termination. They made no monetary claims. By application GEN 18/09402 the appellant did seek compensation in the amount of $30,220 consisting of: a claim for damage to locks of $1,580, a claim for $3,640 by way of reimbursement of rent because certain alleged defects in the studio occupied by the appellant pursuant to the Pop Up agreement had not been repaired, a claim for the cost of replacing "stolen puppet floors" in the amount of $5,000; and a claim for the cost of replacing damaged puppets in the amount of $20,000. All of the appellant's claims were disallowed.
Accordingly, the first instance cost provisions applicable to proceedings GEN 18/09402 permitted the Tribunal to award costs in the absence of special circumstances. The Notice of Appeal in respect of that decision (in appeal number AP 18/11824) sought to set aside the decision of the Tribunal at first instance.
The appellant's submissions in that appeal specifically challenged the rejection of each element of the appellant's claim. It is, therefore, apparent that the amount claimed in proceedings GEN 18/09402 was more than $30,000, that the provisions applicable to the determination of costs in those proceedings differed from those set out in s 60 by reason of rule 38, that rule 38A required the Appeal Panel to apply the provisions of rule 38 in deciding whether to award costs in respect of AP 18/11824, that the amount in issue in AP 18/11824 exceeded $30,000 and that, by reason of rule 38(2)(b), the Appeal Panel does not need to find special circumstances in order to award costs in respect of appeal AP 18/11824.
However, a different position pertains in respect of AP 19/07450. That appeal was brought against the decision in COM 18/44348 and COM 18/44358.
In those proceedings the appellant did not explicitly seek compensation and thus it cannot be said that the amount claimed or in dispute in those proceedings exceeded $30,000. The Tribunal has no evidence of the value of the Pop Up agreement or of its termination, even if it had been found to be wrongful. The same conclusion was arrived at by the Appeal Panel in Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 where the subject matter of the proceedings was also the termination of a tenancy. At [43] to [69] the Appeal Panel comprising the President and two other Members referred to the decision in Jabulani Pty Ltd v Walkabout II Pty Ltd [2016] NSWCA 267. That decision interpreted the phrase "matter at issue" contained in s 101(2)(r)(i) of the Supreme Court Act 1970 (NSW), which the Appeal Panel found was analogous to the words amount "in dispute" as referred to in Rule 38: see Allen v TriCare (Hastings) Ltd at [56]-[57].
We note that the Council conceded in its written submissions that the amount in dispute on the appeal did not exceed $30,000 and that to obtain an order in respect of the costs of the appeal, it needed to establish that there were special circumstances. As we have noted above, in respect of AP 18/11824 that was not correct. As the appeals were heard and dealt with together, it would be a difficult, if not impossible, exercise to distinguish the costs incurred by the Council in one appeal from the costs incurred in the other appeal.
However, because, for reasons which we set out below, we have come to the conclusion that there are special circumstances warranting an award of costs in favour of the Council in both appeals, we do not need to consider whether it is possible or appropriate to make separate costs orders in respect of the two appeals.

Principles applicable to Questions of Costs

The Tribunal must apply established principles when considering an application for costs, and for indemnity costs. The principles concerning costs generally are conveniently set out in Wassef v Panagiotopoulos [2019] NSWCATAP 188 at [26] to [29] inclusive as follows: "26. Section 60(3) of the NCAT Act states that 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. 27. The inclusion of "any other matter that the Tribunal considers relevant" in the list of factors set out in s 60(3) demonstrates that that list is not an exclusive list. 28. The term "special circumstances" is not defined in the NCAT Act. It has been interpreted to mean circumstances that are out of the ordinary but not necessarily extraordinary or exceptional. The discretion to award costs must be exercised judicially having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]. 29. In Alexander James Pty Ltd v Pozetu Pty Ltd (No. 2) [2016] NSWCATAP 75 at [14] the Appeal Panel stated: 14. 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. There are no scientific means by which the former can be ascertained. The evaluative process is necessarily one of impression informed by the particular provisions of section 60, which by sec 60(3)(f) incorporates also a consideration of section 36(3) of the Act."
In Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120, references made to a decision of the New South Wales Court of Appeal where the term "special circumstances" was considered as follows at [11]: "The expression "special circumstances" was considered by the Court of Appeal in the context of section 88(1) of the Administrative Decisions Tribunal Act 1997 (NSW). Santow JA said in Cripps v G & M Mawson [2006] NSWCA 84 at [60]: I consider that the Tribunal was in error in failing to conclude that special circumstances apply here. For this purpose it suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional.""
Similar observations were made in Eager v North Sydney Retirement Trust (No.2) [2019] NSWCATAP 92. The Appeal Panel said at [22]-[24]: "22. In determining whether there are the required special circumstances it is not necessary to find that the circumstances are extraordinary or exceptional: SCC (Sam Construction Company) Pty Ltd v Wingate [2017] NSWCATAP 222 at [19]; Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]; Zeaiter Corporate Holdings Pty Ltd v Satchitanantham (No2) [2009] NSWADT 70 at [37]. 23. The Tribunal retains a discretion whether to award costs even if it is satisfied that there are special circumstances warranting an award of costs: see the word "may" in s 60(2). 24. The discretion to award costs under s 60 should be exercised having regard to the underlying principle that parties before the Tribunal are ordinarily to bear their own costs: SCC at [23]."

Finding

In Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [76] the Appeal Panel observed at [76]: ""[S]pecial circumstances" for the purposes of s 60(2), are those which are out of the ordinary but they do not have to be extraordinary or exceptional: see the Appeal Panel in CPD Holdings Pty Ltd v Baguley [2016] NSWCATAP 160 at [6]; citing the Court of Appeal in Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 at [60] which concerned the same expression in the previous legislation governing the (then) Administrative Decisions Tribunal. In addition, s 60(3) gives a non-exhaustive list of matters that the Tribunal may take into account when determining whether there are special circumstances. …"
The Appeal Panel said at [71]: "Section 60 of the NCAT Act states a general proposition in subs (1) that each party to proceedings in the Tribunal is to pay the parties own costs. Section 60 (2) modifies this by permitting the Tribunal to award costs but "only if it is satisfied that there are special circumstances warranting an award of costs."
The Appeal Panel finds that the appeals were bought without any sound reason. Nothing new was advanced, no new arguments raised that had not already been fully dealt with, and no submissions made which make any difference to the findings already made before the Tribunals at first instance. The proceedings were not complex: they raised issues concerning the right of the Council to terminate the sub-licence. Yet the appellants have pursued the appeal without being able to identify legal error in any finding by the Tribunal members. The decisions at first instance have been carefully considered, and the Appeal Panel, subject to one aspect concerning costs, has confirmed the correctness of those decisions.
Essentially the appellant re-litigated its arguments raised before the Tribunal at first instance in each case. Subject to one issue concerning the variation of a costs order, as referred to above, the orders in favour of the Council made at first instance remain.
Where an appeal is instituted without any justification, apart from a general dissatisfaction by the disappointed litigant, and no question of law or new matter is advanced in support of the appeal, the Appeal Panel considers that such circumstances constitute "special circumstances". Proceeding with the appeal in those circumstances has the consequence that one party is prejudiced by incurring unnecessary costs which were totally avoidable. The appellant has conducted the proceedings in a way which unnecessarily disadvantaged the Council and on this ground special circumstances exist: see section 60 (3) (a). Further, the appeal constituted a claim that had no tenable basis in fact or in law within the meaning of section 60 (3) (c). The proceedings were wholly misconceived and lacked any substance as referred to in section 60 (3) (e). In this respect the Council has been unnecessarily disadvantaged, and the proceedings have been prolonged unreasonably in circumstances where there was no substance in the appeal.
We note also that the Council made an offer to settle the proceedings, acceptance of which would have involved the appellant receiving a payment of $10,000 and being released from any obligation to pay the Council's costs in proceedings GEN 18/09402. The appellant would, if it had accepted the offer, have been at least $15,000 better off than the result it achieved on the appeals. It has been held in decisions of the Administrative Decisions Tribunal that an unreasonable failure to accept an offer of settlement can itself constitute special circumstances (Zeaiter Corporate Holdings Pty Ltd v Satchithanantham (No.2) [2009] NSWADT 70 at [41]; De Luca v Scuccimarra (No.2) [2007] NSWADT 245).
We are satisfied, independently of the offer, that there are special circumstances in this case. The appellant's rejection of the offer confirms our view in that regard. Accordingly we will make an order that the appellant pay the costs of the Council.

Indemnity costs

The Council has sought that costs be awarded on the indemnity basis from the date upon which the time for acceptance of its offer of 17 April 2019 expired, that is 26 April 2019. The Council submits that the appellant's failure to accept the offer was unreasonable and warrants an order for indemnity costs.
An award of costs against a party is not punitive: rather, it is intended to indemnify the successful party: see Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 per McHugh J at [67]. In Mendonca v Tonna [2017] NSWCATAP 176 an Appeal Panel of the Tribunal discussed, at paras [59] to [64], the circumstances in which an indemnity costs order might be made. The Appeal Panel stated: 59. Indemnity costs are only awarded in limited circumstances. The discretion to do so must be the subject of careful reasoning (Degmam Pty Ltd (In Liq) v Wright (No 2) [1983] 2 NSWLR 354) and caution should be exercised in making such an award: Leichhardt Municipal Council v Green [2004] NSWCA 341; Ng v Chong [2005] NSWSC 385 at [13]. 60. Other than in relation to the unreasonable refusal of a genuine offer of settlement, one circumstance in which indemnity costs may be awarded is when a case is commenced or continued where there is no chance of success (Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No 2) [2009] NSWCA 12 at [4]), such as where the claim is "without substance", "groundless", "fanciful or hopeless" or so weak as to be futile, such as where a limitation period is obviously at an end: Hillebrand v Penrith Council [2000] NSWSC 1058. However, mere weakness of a case will not be sufficient to warrant an exercise of the discretion to award indemnity costs: Wentworth v Rogers (No 5) (1986) 6 NSWLR 534. 61. In this case, Dr Mendonca's fundamental case is that she has a residential tenancy agreement with Mr Tonna and that he owes a significant amount of rent arrears. .... 62. Another circumstance which may warrant an order for costs on an indemnity basis is where the proceedings amount to an abuse of process: Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359 at 362. Examples of abuse of process include where the proceedings are commenced other than in good faith or for an ulterior or collateral purpose: Palmer v Gold Coast Newspapers Pty Ltd [2013] QSC 352; Packer v Meagher [1984] 3 NSWLR 486 at 500. … 63. An award of indemnity costs may also be made for unreasonable conduct. Such conduct may include unnecessarily prolonging the proceedings, (Degmam Pty Ltd (in liq) v Wright (No 2), at 358); unfounded allegations of fraud or improper conduct (Maule v Liporoni (No 2) (2002) 122 LGERA 216 at 229); deliberate or high-handed conduct (Rouse v Shepherd (No 2) (1994) 35 NSWLR 277) and behaviour which causes unnecessary anxiety, trouble or expense, such as the failure to adhere to proper procedure (FAI General Insurance Co Ltd v Burns (1996) 9 ANZ Ins Cas 61-384). Disregard of court orders may justify an indemnity costs order (O'Keefe v Hayes Knight GTO Pty Ltd [2005] FCA 1559 at [35]). Perverse persistence by an unrepresented litigant with a hopeless application may also do so: Rose v Richards [2005] NSWSC 758. 64. Misconduct of a serious nature, such as fraud, perjury, contempt or dishonest conduct may also justify costs being awarded on an indemnity basis: Berkeley Administration Inc v McClelland [1990] FSR 565 at 568-569; Ivory v Telstra Corporation Ltd [2001] QSC 102); Vance v Vance (1981) 128 DLR (3d) 109 at 122.
The circumstances in which indemnity costs should be awarded, as provided by s 60(4)(a), were also considered in Eager v North Sydney Retirement Trust (No.2) [2019] NSWCATAP 92 at [26]-[27], where the Appeal Panel said: "26. In Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Bishop Irinej Dobrijevic (No 3) [2017] NSWCA 109 the New South Wales Court of Appeal cited (at [60]) the well known passage from the decision of Justice Shepherd in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 (at 230-234) as setting out the principles applicable to an award of indemnity costs: "In consequence of the settled practice which exists, the Court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course. That has been the view of all judges dealing with applications for payment of costs on the indemnity or some other basis whether here or in England. The tests have been variously put. The Court of Appeal in Andrews v. Barnes (39 Ch D at 141) said the Court had a general and discretionary power to award costs as between solicitor and client "as and when the justice of the case might so require." Woodward J in Fountain Selected Meats appears to have adopted what was said by Brandon LJ (as he was) in Preston v. Preston ((1982) 1 All ER at 58) namely, there should be some special or unusual feature in the case to justify the Court in departing from the ordinary practice. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at 8) in Tetijo, "The categories in which the discretion may be exercised are not closed". Davies J expressed (at 6) similar views in Ragata. Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v. Weekes (1989) 92 ALR 131 at 152; evidence of particular misconduct that causes loss of time to the Court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v. Hutchinson (1987) 10 NSWLR 525, Maitland Hospital v. Fisher (No. 2) (1992) 27 NSWLR 721 at 724 (Court of Appeal), Crisp v. Keng (Supreme Court of New South Wales, 27 September 1993, unreported, Court of Appeal) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records). Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis. The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis. It remains to say that the existence of particular facts and circumstances capable of warranting the making of an order for payment of costs, for instance, on the indemnity basis, does not mean that judges are necessarily obliged to exercise their discretion to make such an order. The costs are always in the discretion of the trial judge. Provided that discretion is exercised having regard to the applicable principles and the particular circumstances of the instant case its exercise will not be found to have miscarried unless it appears that the order which has been made involves a manifest error or injustice." 27. In exercising the costs powers the Tribunal must seek to give effect to the guiding principle to facilitate the just, quick and cheap resolution of the real issues in the proceedings: s 36(1) and (2)(a) of the NCAT Act."
The Appeal Panel is mindful that each of these proceedings has had a long history arising out of a termination of the licence agreement, and significant costs have been incurred by the Council. We have no reason to doubt the assertion in the Council's written submissions that those costs exceed $30,000. The appellant has been unsuccessful in relation to both appeals, save in one minor respect, which was not really contested by the Council. More significantly, the Council's offer of settlement would, if accepted, have put the appellant in a better position than it achieved in the appeals. The offer made by the Council to settle the proceedings was a significant compromise and the appellant's rejection of the offer was not reasonable. It follows that it is appropriate to make an order that the Council receive costs on the indemnity basis from the date of expiry of the offer.
We note that, strictly, the offer lapsed on 23 April 2019 when the appellant made a counter-offer (Hyde v Wrench (1840) 3 Beav 334; 49 ER 132). However as the Council only seeks indemnity costs from 26 April 2019, we will award indemnity costs from that date.
The Council seeks an order fixing the costs of the appeals at $28,000. The Council has not provided the detail concerning its costs which would enable us to undertake consideration whether that, or any other figure, is appropriate. In those circumstances it would not be appropriate to make an order fixing the costs of the proceedings: 203 Castlereagh Street Pty Ltd v Skybloo Holdings Pty Ltd [2017] NSWCATAP 29 at [39]-[46]..
We recognise that there are grounds to believe that the appellant would be unable to pay any sum for costs, since it has provided no annual returns to the appropriate regulatory authorities since 2017 and its last known assets were claimed to be worth $5,000. No other information has been provided concerning the financial capacity of the appellant to meet any order for costs or the costs of a further assessment. One circumstance in which a fixed costs order would be appropriate is where the costs debtor would be unable to make payment of those costs: Hamod v State of New South Wales [2011] NSWCA 375 at [813], [816] and [817]; eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd (No 2) [2015] NSWCA 422 at [30]. Nevertheless, that circumstance does not avoid the need to provide a proper basis upon which such an order might be made.
In respect of the costs order made in proceedings GEN 18/09402, the Council seeks an order that costs be assessed in the amount of $5,000 to avoid further expenditure on an assessment. We consider that such an order should be made in order to avoid continued costs. The order we made by the substantive decision on the appeal limited the costs which the Council might recover in respect of proceedings GEN 18/09402 to $5,000. In reliance upon the order of the Senior Member at first instance, the Council had, by the time the appeal was heard, already submitted its costs for assessment and ultimately received a certificate assessing those costs at a figure in excess of $20,000. We see no reason why the Council should need to undertake a further process of assessment, and we consider it appropriate to fix the Council's costs of proceedings GEN 18/09402 at $5,000.

Orders

The Tribunal orders that: 1. A hearing on costs is dispensed with pursuant to s 50(1)(c) of the Civil and Administrative Tribunal Act 2013. 2. The appellant is to pay the costs of the respondent in proceedings AP 19/11824 and AP 19/07450 as agreed or assessed on the ordinary basis until 26 April 2019 and on the indemnity basis thereafter. 3. In proceedings GEN 18/09402, the costs be determined in the amount of $5,000 as a lump sum.

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: 16 September 2019

Administrative Decisions Tribunal Act 1997(NSW)

(2002) 122 LGERA 216

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