STAR Training Academy Pty Ltd v Commissioner of Police

NCAT Appeal Panel|2022-04-04|Before: Ms J

Background

On 28 October 2021, we dismissed an appeal by STAR Training Academy Pty Ltd (STAR), a Registered Training Organisation that is accredited with vocational educational and training regulatory authorities to conduct training relevant to a variety of occupations: STAR Training Academy Pty Ltd v Commissioner of Police [2021] NSWCATAP 370. In doing so, for reasons we gave on 18 November 2021, we upheld a decision of the Tribunal at first instance that, upon the proper construction of s 27A of the Security Industry Act 1997 (NSW), the Tribunal lacked jurisdiction to review a decision by the respondent Commissioner to revoke STAR's approval to provide approved training, assessment and instruction.
The Commissioner sought costs, and relied on written and oral submissions at the hearing. We made directions for further submissions to be made in writing, and advised the parties that we may dispense with a further hearing in respect of the application noting that the parties had the opportunity to make submissions on that issue.
If successful in obtaining an order for costs, the respondent seeks them in a lump sum. The costs sought, in the sum of $17,307.35, are particularised as follows: 1. Counsel's fees in the sum of $4,687.50 for counsel initially briefed in the proceedings where briefing alternate counsel was subsequently required for reasons set out below; and 2. One half of the respondent's estimated party and party costs excluding other counsel's fees, in the sum of $12,620.35.

The law applicable to this costs application

It is common ground, and correct, that the question of costs falls to be determined by reference to s 60 of the Civil and Administrative Tribunal Act 2013 (NSW) ("NCAT Act"). Section 60(1) sets out the prima facie position that each party is to bear their own costs. Section 60(2) provides the Appeal Panel with a discretion to make an award of costs if we are first satisfied that there are special circumstances warranting it. In deciding whether there are special circumstances, the factors set out in s 60(3) may be considered.
Section 60(3) provides a non-exhaustive list of relevant factors, ending with subpart (g): (g) any other matter that the Tribunal considers relevant.
Clearly, then, the relevant factors are not constrained to those contained in s 60(3) and each case must be determined on its own particular facts and circumstances.
Special circumstances are those which are out of the ordinary. They need not be extraordinary or exceptional: Edwards v Commissioner for Fair Trading, Department of Customer Service (Costs) [2019] NSWCATAP 249 at [9].
If we are satisfied that there are special circumstances, then before making a costs order we must further be satisfied that they are circumstances "warranting an award of costs": Fitzpatrick Investments Pty Ltd v Chief Cmr of State Revenue [2015] NSWCATAD 103. The discretion is to be exercised judicially.

The bases of the respondent's costs application

The Notice of Appeal was lodged before the appellant had the benefit of the Tribunal's reasons. On that basis, it is understandable that it may have been difficult for the appellant to settle upon the formulation of the grounds on which it would, ultimately, rely.
Once the reasons were given, however, the appellant did not act upon the respondent's requests that it identify its grounds with more particularity.
The bases upon which the respondent seeks to displace the usual position that each party bear their own costs were as follows: 1. That the appellant failed to properly articulate a question of law, either in its Notice of Appeal or submissions. Further, the appellant declined to amend its filed submissions in response to the reasons given by the Tribunal to identify an error in the Senior Member's reasons. As a result, the respondent was forced to prepare to argue before the Appeal Panel all aspects of the matters already put to the Tribunal at first instance; and 2. The appellant's conduct of the appeal unnecessarily disadvantaged the respondent. For example, the applicant consistently served documents without giving the respondent time to reply; the appellant failed to lodge an application for a stay with its notice of appeal, and yet subsequently pressed the Appeal Panel for an order to that effect.

Failure to properly identify a question of law

In our decision determining the appeal, we indicated that we were satisfied that the appellant had identified a question of law: reasons at [13].
As we indicated, though, we located that question of law in a paragraph of the appellant's submissions. It was not drawn to our attention through being properly set out in the Notice of Appeal or the associated grounds lodged with it. Indeed, with respect, the appellant did not appear to have prepared for the hearing with a clear focus on the necessity of precisely identifying the question of law it relied upon.
Where, as here, an appeal is solely based on a question of law, "[t]he existence of a question of law is ... not merely a qualifying condition to ground the appeal, but also the subject matter of the appeal itself.": TNT Skypak International (Aust) Pty Limited v Commissioner of Taxation (Cth) [1988] FCA 119; (1988) 82 ALR 175, adopted by the Appeal Panel in ZAH v ZAI [2016] NSWCATAP 242 at [61].
In this Tribunal, where self-represented parties form the vast majority of appellants in internal appeals, the strictures on requiring them to identify the questions of law they rely upon have been, properly in our view, relaxed. The Appeal Panel will, where appropriate and where it can be done without unreasonable prejudice to the respondent, attempt to identify the question(s) of law raised from the material lodged by the appellants. That course follows what has become accepted practice even in many courts: see, for example Haritos v Commissioner of Taxation [2015] FCAFC 92 at [101] to [105].
In doing so, the Appeal Panel also needs to balance the need to frame the question(s) of law with specificity against the need to respond to a large and ever increasing workload. It should also ensure that its reasons are clear to the parties, which may lead to somewhat less precise identification of the question(s) of law than may be expected from parties pleading those questions in a Court.
Striking an appropriate balance of the triune of objectives in s 36 of the NCAT Act is not a simple task in this regard. Justice Hill, writing extra-judicially, noted in a published address in 1995 that "considerable time is taken in a quite large percentage of cases to argue whether there is a question of law and thus a right to appeal": Hill G "What Do We Expect From Judges In Tax Cases?" (1995) 65 ALJ 992 at 995. Whilst the work of the courts is not to be compared to the work of this Appeal Panel, the increase in self-represented litigants since that time alone is unlikely to lead to a different conclusion as to the magnitude of the task of identifying errors on a question of law not clearly articulated, ensuring procedural fairness to the other party by not over zealously identifying questions not clearly raised, and answering the question. In addition, unlike the provisions governing appeals to Courts which have led to the much of the available jurisprudence on this topic, internal appeals to this Appeal Panel may generally be made "as of right on any question of law or, with the leave of the Appeal Panel, on any other grounds": NCAT Act, s 80(2)(b).
Thus, in such matters, the distinction between an error on a question of law and an error of law for which leave must properly be granted may not always be clearly exposed, but should be borne in mind. We note the importance of what the Court in Orr v Cobar Management Pty Limited [2020] NSWCCA 220 described at [52] as the distinction between "the question of law/question of fact dichotomy and the error of law/error of fact dichotomy". There, the Court noted, with several relevant citations, that "[a] question may, in its form, sufficiently identify a possible error of law, but may nevertheless not qualify as a "question of law" or be readily answered as a question of law."
How a legally represented appellant should approach the task of identifying a question of law, in the context of completing the Tribunal's prescribed Notice of Appeal was set out in Theophilas v Chief Commissioner of State Revenue [2016] NSWCATAP 111, at [24]: In notices of appeal prepared by lawyers or with legal assistance, the asserted questions of law should be clearly separated from other grounds within the notice of appeal itself. We accept that it is permissible for the appellant to seek to keep alive grounds that are not regarded as raising questions of law by asking for them to be treated as 'other grounds'. The notice of appeal should contain brief reasons as to why the discretion to grant leave for grounds other than questions of law should be exercised...
On that basis, particularly where a legally represented appellant is on notice that the issue of whether they have properly identified a question of law will be raised against them, some effort should be made to follow the process outlined in Theophilas. If for no other reason, doing so should be considered best practice in complying with the practitioner's duties set out in s 36(3)(b) of the NCAT Act to co-operate with the Tribunal to give effect to the guiding principle.
Here, the purported question of law relied upon by the appellant in its Notice of Appeal was that: The Senior Member had erred in law by holding that the Tribunal has no jurisdiction to review the decision of the respondent made on 20 September 2021.
Despite the notorious difficulty in precisely identifying a question of law, it is clear that this does not do so. Whilst not determinative, it is useful to start by framing a question of law as a question. However, in Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515 at 527; [1990] FCA 689, Ryan J observed that "if the question, properly analysed is not a question of law, no amount of formulary like 'erred in law' or 'was open as a matter of law' can make it into a question of law."
What we located, at [4] of the appellant's submissions, though, was the following, which the appellant described as the "critical question": [W]hether the decision of the Commissioner to "revoke" approvals under s 27A of the [Security Industry] Act is a decision that falls within the meaning of s 29(1).
We were satisfied, and the respondent did not take issue with the suggestion, that this sufficiently raised and identified the question of law to be determined.
It is perhaps unfortunate, but internal appeals prepared with legal assistance that follow the guidance set out in Theophilas are not, in our experience, the usual or norm. The appellant's failure to identify its question of law with precision in its Notice of Appeal would not, in our view, constitute special circumstances. Nor could we be satisfied it warranted an award of costs where the question was identified at the forefront of the appellant's submissions. Of course, had the appellant amended its Notice of Appeal, the respondent would have incurred the consequent expense of amending its Reply.
The respondent also says that the appellant's lack of particularity led it to merely restate the arguments made in the hearing at first instance and that the respondent was consequently put to expense in dealing with all of those issues in response. That may be so, but those arguments went to the proper construction of the relevant sections of the Security Industry Act 1997, a necessary course to resolve the appeal.
We are not satisfied that these issues enliven our ability to make an order as to costs.

The appellant's conduct of the appeal

The respondent also raises several issues regarding the appellant's conduct of the appeal as relevant to the determination of her application for costs.
Leaving aside what occurred in the proceedings at first instance, which can have no proper bearing on our considerations, they were: 1. The appellant applied for a stay of the Revocation Decision instead of applying to stay the decision by Senior Member Ransome on 23 September 2021 (despite such an application being of limited utility). This had the practical effect of providing the Appellant with a second opportunity to run an identical case. As a result, the Respondent was placed in a position where it had to repeat the same arguments twice, the second being the hearing before Deputy President Westgarth. 2. That the appellant consistently served the respondent with materials late, so that she could not properly consider and respond to them. The following examples were given: 1. At 3:12pm on 13 October 2021 , the day before the hearing of the stay application before the Appeal Panel, the appellant served a third affidavit of Javaid Malik; and 2. At 5:00pm on 25 October 2021, the day before the Appeal Panel hearing, the Appellant served another affidavit of Javaid Malik dated 25 October 2021, despite there being no direction for the Appellant to file further evidence.
The respondent also raised concern as to the appellant's communication with the Tribunal, noting that at 5:26pm on 5 October 2021, without any prior notice, the appellant served the respondent with orders indicating that the appeal had been listed on 7 October 2021 at 2:15pm for the purpose of a directions hearing (rather than on 22 October 2021 in accordance with the original listing notice received from the Appeal Panel). The respondent's concerns in this regard stemmed from the following uncontroversial facts: 1. The expedited directions hearing was sought and obtained by the appellant via correspondence with the Tribunal, which was sent without the respondent's knowledge or consent. When the respondent became aware the date had changed, it requested all correspondence between the appellant and the Appeal Panel regarding the Appellant's request for expedition. The correspondence confirmed the following: 1. the appellant would again seek orders staying the Revocation Decision; and 2. the appellant had requested an expedited appeal hearing date on 29 September 2021. 1. The appellant gave the respondent no notice of its communications with the Appeal Panel, directed to the President of the Tribunal, and communicated with the Appeal Panel without first notifying or discussing the requests with the respondent. The respondent was required to request that the appellant provide it with copies of correspondence between it and the Appeal Panel in order to be aware of the content of those communications.
The respondent asserts that, given that the appellant had not included the respondent in this correspondence, or conveyed its intentions to the respondent that it would be seeking an expedited hearing or stay of the revocation decision, the respondent was prejudiced in its preparation for the directions hearing on 7 October 2021.
Additionally, the respondent says that by seeking expedition of the hearing of the appeal, the proceedings were listed for hearing on 26 October 2021, a date which was unsuitable to the respondent's counsel (as advised by the respondent at the directions hearing before Deputy President Westgarth). The respondent says she was therefore forced to brief other counsel to appear in the appeal proceedings, incurring unnecessary expense.
In response, the appellant says that Deputy President Westgarth "invited [it] to make application for a stay" during the directions hearing, and then allowed the respondent further time to lodge and serve material she relied upon in opposition to the proposed stay. It also says that the arguments on the stay subsequently made before the Deputy President were the same as those made before the Tribunal at first instance, and so disputed that significant extra costs were incurred.
It says, without drawing our attention to any supporting evidence, that the respondent was "on notice" that it would seek a stay in the conduct of the appeal.
Little else of the respondent's factual assertions was put directly in issue.
Parties, and particularly their legal representatives, should not be lulled by the relaxed procedures adopted by this Tribunal into the view that it is necessarily appropriate to make unilateral approaches to the Tribunal to seek orders or indulgences.
Rule 22 of the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 (NSW) applies to both courts and tribunals: see the definition of "court" in the glossary of terms.
Rule 22.5 sets out that a solicitor must not, outside an ex parte application or a hearing of which an opponent has had proper notice, communicate in the opponent's absence with the court concerning any matter of substance. Rule 22.5 allows for two exceptions, namely where the court first communicates with the solicitor in such a way as to require a response (r 22.5.1) and where the opponent has consented beforehand to the solicitor communicating with the court in a specific manner notified to the opponent by the solicitor (r 22.5.2).
In FAL Management Group Pty Ltd v Denham Constructions Pty Ltd [2015] NSWSC 1035, at [5], McDougall J made comment on this practice where it related to seeking an urgent hearing, that: If the email had sought (for example) no more than the urgent listing of the matter for directions in respect of the subpoenas, that might have been acceptable. However, it went further. It set out what were in effect written submissions containing the reasons why, it was said, the subpoenas were required. Those submissions set out a number of contentious matters.
Having reviewed the appellant's correspondence to the Tribunal, those comments are apposite here, given the references to the appellant's allegedly parlous financial position if the hearing was not expedited so that it may retain its licence.
Later, at [7], His Honour noted that "[t]o my mind, the time has come to take a stand on this" and went on to consider whether a referral for disciplinary investigation was warranted.
In our role in determining the costs application issues of discipline are irrelevant, as costs are not punitive but intended to compensate a successful party.
Quite separate from that, however, writing to the Tribunal without first contacting one's opponent or, as here, even copying them to the correspondence, is inherently likely to increase costs.
That relates not only to the costs of one's opponent having to investigate what has occurred in order to properly advise their client, but also the potential, which eventuated here, that the result of a unilateral approach may directly cause other costs to be incurred.
We also accept that the appellant's repeated application for a stay after the Tribunal found that it lacked jurisdiction, and before that issue was properly re-agitated in the appeal, led to the respondent incurring increased and unnecessary costs. We find that the appellant's unilateral approach to the Tribunal for an expedited hearing also did so.
We are satisfied that these circumstances are sufficiently unusual to enliven our discretion to award costs. Taken with the appellant's failure to comply with directions in the appeal, we agree that an order for costs in favour of the respondent is warranted.

A lump sum order?

Section 60(4)(b) of the NCAT Act provides that the Tribunal may 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.
Deriving the relevant principles applicable to ordering costs in a lump sum from those deemed appropriate by the courts, we note that: 1. The discretion is not confined and may be exercised whenever the circumstances warrant its exercise: Harrison & Anor v Schipp [2002] NSWCA 213; 54 NSWLR 738 per Giles JA at [21]-[22]; 2. "The power should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available.": ibid, at [22]; 3. The power must be exercised judicially and only after giving the parties an adequate opportunity to make submissions. The Tribunal should be confident that the approach taken to estimate costs is fair, logical and reasonable: Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; 135 ALR 160, von Doussa J; 4. The use of the power may be appropriate where the formal assessment would disadvantage the successful party because of the likely inability of the unsuccessful party to discharge the costs liability in any event: Harrison v Schipp; Sony Entertainment (Aust) Ltd v Smith (2005) 215 ALR 788 at [90], [194]-[195]; Hadid v Lenfest Communications Inc [2000] FCA 628; 5. The power may also be exercised where a party's conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings: Leary v Leary [1987] 1 WLR 72; [1987] 1 All ER 261; Sony Entertainment (Aust) Ltd v Smith; Microsoft v Jiang (2003) 58 IPR 445; [2003] FCA 101; 6. The assessment of any lump sum to be awarded must consider the complexity of the issues raised on the pleadings; the interlocutory processes; the preparation for final hearing and the final hearing: Smoothpool v Pickering [2001] SASC 131; 7. In the exercise of its discretion the Tribunal is not required to undertake a detailed examination of the kind that would be appropriate to taxation or formal costs assessment: Harrison v Schipp at 743; Hadid v Lenfest Communications Inc at [35]; Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1 at 5; [1999] FCA 673; 8. A discount of the costs actually incurred or estimated may be applied, in order to take into account the contingencies that would be relevant in any formal costs assessment: Leary v Leary at [76] per Purchas LJ; Beach Petroleum NL v Johnson (No 2) at 123; Auspine Ltd v Australian Newsprint Mills Ltd at 164-165. A discount in the range of 10-30% is typically appropriate: Ross v Padget [2016] NSWSC 1851 at [16] and [21]; Fisher-Pollard by her tutor Fisher-Pollard v Fisher-Pollard [2018] NSWSC 807 at [38]). However, the appropriate order in each case will turn upon the evidence: Hamod v State of New South Wales [2011] NSWCA 375 at [813] per Beazley JA (Giles and Whealy JJA agreeing); 9. On the one hand the Tribunal must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary "fail safe" discount on the cost estimates submitted to the Court: Leary v Leary at 265; 10. Finality to litigation is in everyone's interest. In many cases that factor alone will weigh heavily on whether a lump sum costs order should be made: Edward Ted Lakis and Anor v Michael Victor Lardis and Anor (No 3) [2018] NSWSC 1296 at [57]; Lawcover Insurance Pty Ltd v Muriniti and Newell [2018] NSWSC 558 at [10]; 11. Where a lump sum costs order is appropriate, the Tribunal should take a "broad brush" approach to determining the lump sum: Harrison v Schipp; 12. Requiring the same or similar level of detail as in a formal costs assessment would defeat the purpose of the lump sum order." Bechara (T/as Bechara and Co) v Bates [2016] NSWCA 294 at [14].
Whilst the estimate of the respondent's costs was not itemised to any extent, it was not challenged by the appellant and, broadly, appears to fall within a reasonable range.
In circumstances where the respondent already acknowledges that only part of her costs should be awarded, we may take some comfort that there is no need for us to apply a significant further discount to take into account the contingencies of formal assessment or due to the risk of overestimating the respondent's costs. Applying too liberal a further discount would have the potential to work an injustice on the respondent.
However, we think that the issues we have found to warrant an award of costs make it appropriate to award less than 50% of the respondents estimated costs excluding counsel. Whilst we agree that counsel's fees should also be allowed in part, there was no breakdown available to us of the amount thrown away by the respondent needing to re-brief after the hearing was expedited.
Notwithstanding those issues, however, we still think it appropriate to award costs in a lump sum. The evidence, and the outcome of the appeal, indicates that the appellant may be unable to discharge the costs liability and the issue of finality, given the sum we intend to award, is a weighty consideration. We are confident we can make an appropriate order based on the evidence before us.
We are satisfied that the appropriate award is that the appellant pay the respondent's costs, fixed in the sum of $7,000.00.

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: 04 April 2022

Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015(NSW)

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