[2007] AATA 1763
General information, not legal advice.
Administrative Appeals Tribunal of Australia
2007-09-14
Original judgment source is linked above.
"Where, in any proceedings instituted by the claimant, the Administrative Appeals Tribunal makes a decision:
varying a reviewable decision in a manner favourable to the claimant; or
setting aside a reviewable decision and making a decision in substitution for the reviewable decision that is more favourable to the claimant than the reviewable decision;
Tribunal may, subject to this section, order that the costs of those proceedings incurred by the claimant, or a part of those costs, shall be paid by the responsible authority."
"1. The decision of the Administrative Appeals Tribunal made on 28 November 2005 be set aside.
2. The case be remitted to the Administrative Appeals Tribunal to be heard and decided again according to law, limited to the evidence and materials before it for the purpose of the decision referred to in order 1.
a. the order for costs made by the Administrative Appeals Tribunal on 23 June 2003 only entitles the applicant to recover costs in respect of matter N2001/750.
b. nothing in paragraph (a) prevents the Administrative Appeals Tribunal from determining whether the applicant is entitled to recover the whole or any amount in respect of costs of any Item claimed which was relevant to matter N2001/750, notwithstanding that such Item may also have been relevant to matter N2002/730.
4. The respondent pay the applicant's costs of the proceedings fixed pursuant to O 62 r 4(2)(c) in the total amount of $ 13,500.
One possible injustice in this scheme has been shown by the present case. That is where, as here, the party entitled to costs is an individual who does not have the benefit of his or her own input tax credits against which to offset the GST which he or she is liable to pay to their solicitors. A business conducting litigation which recovers costs, will have already had the benefit of being able to net off the payment of GST it was obliged to make to the suppliers of taxable supplies, including solicitors for legal services in connection with the business, against receipts of GST which the business will have obtained from its own supplies of goods or services. Individuals who are not conducting a business will not be able to effect that accounting and taxation consequence and will, to that extent, be worse off when receiving the benefit of an order for costs under the current provisions of the rules. However, that is a matter for the rules committee to address and is not one which the court can recognize in a case like the present.
Accordingly, there was no error in the decision of the Tribunal in this respect."
2. The case be remitted to the Administrative Appeals Tribunal to be heard and decided again according to law, limited to the evidence and materials before it for the purpose of the decision referred to in order 1.
"Section 69A Procedure for taxing costs
(a) the Tribunal has, under this Act or any other Act, ordered a party to a proceeding to pay to another party to the proceeding reasonable costs incurred by the other party; and
(b) the parties are unable to agree as to the amount of those costs;
the President may give such directions as he or she thinks appropriate for the costs:
(d) to be taxed by the Registrar, a District Registrar or a Deputy Registrar.
(2) If the Registrar, a District Registrar or a Deputy Registrar has taxed under paragraph (1)(d) the amount to be paid to a party to a proceeding by another party to the proceeding, either of those parties may apply to the Tribunal for review of the amount so taxed.
(3) If such an application is made, the Tribunal must review the amount taxed and may:
(b) set aside the amount and substitute another amount; or
(c) set aside the amount and remit the matter to the Registrar, District Registrar or Deputy Registrar, as the case may be, to be taxed in accordance with the directions of the Tribunal.
(4) An amount that a party to a proceeding is required under an order made by the Tribunal to pay to another party to the proceeding is recoverable by the other party as a debt due to the other party by the first-mentioned party."
a) the order for costs made by the Administrative Appeals Tribunal on 23 June 2003 only entitles the application to recover costs in respect of matter N2001/750.
b) nothing in paragraph (a) prevents the Administrative Appeals Tribunal from determining whether the application is entitled to recover the whole or any amount in respect of costs of any item claimed which was relevant to matter N2001/750, notwithstanding that such item may also have been relevant to matter N2002/730."
particular language of s67(8) - "costs of those proceedings" - considered in the context of the three tiers of decision making enshrined in the SRC Act make this a necessary matter to address. Costs incurred for the purposes of the original determination or of the reviewable decision are in my view costs of "proceedings" other than the Part VI proceedings for which s67(8) costs are payable. To this extent I am in agreement with Comcare's submissions.
_I did indicate that that agreement is subject to one qualification. It is this. It was submitted that no expense incurred before the reviewable decision was capable of being an allowable cost under s67(8). I am unable to agree with this temporal limitation. My reason is that the critical question is not: When were the costs incurred? but rather: What were the proceedings for which they were incurred?_may be evidence in which costs can be incurred well before a reviewable decision is given and can be incurred not for the reviewable decision or, for that matter, for the original determination, but for the purposes of a projected appeal to the Tribunal. I refrain from attempting to exemplify situations in which this may be so. It is only necessary to acknowledge the possibility of this. But having so concluded that preliminary expenses cannot be subjected to a temporal limitation, I must add that it would in my opinion require distinctive evidence indeed before it could properly be said that expenses incurred (a) before the original determination, or (b) before the reviewable decision were not incurred for those proceedings but were incurred despite them for a projected Part VI proceedings. What in my view is not sufficient to attract the characterisation of "costs of the proceedings" for s67(8) purposes is the mere proof that the prior incurred costs were useful in the Part VI proceedings."
REVIEW OF THE BILL OF COSTS IN MATTERS N2001/750 AND N2002/730 PURSUANT TO THE DECISION OF RARES J AND SECTION 69A(3) OF THE AAT ACT
"The taxing officer should place himself in the position of the solicitor sitting in his office chair engaged in the task of preparing the case for trial, and to use the words of Sachs J in Francis v Francis and Dickerson 'in particular care must be taken not to be affected by what is colloquially known as 'hindsight'.' The question of the necessity for or propriety of any Item of costs should be judged by the state of things known or which ought reasonably to have been known to a diligent solicitor at the time when the expenditure was made or the liability therefore was incurred."
"The taxing officer should place himself in the position of the solicitor sitting in his office chair engaged in the task of preparing the case for trial, and to use the words of Sachs J in Francis v Francis and Dickerson 'in particular care must be taken not to be affected by what is colloquially known as 'hindsight'.' The question of the necessity for or propriety of any Item of costs should be judged by the state of things known or which ought reasonably to have been known to a diligent solicitor at the time when the expenditure was made or the liability therefore was incurred."
"The taxing officer should place himself in the position of the solicitor sitting in his office chair engaged in the task of preparing the case for trial, and to use the words of Sachs J in Francis v Francis and Dickerson 'in particular care must be taken not to be affected by what is colloquially known as 'hindsight'.' The question of the necessity for or propriety of any Item of costs should be judged by the state of things known or which ought reasonably to have been known to a diligent solicitor at the time when the expenditure was made or the liability therefore was incurred."
"The taxing officer should place himself in the position of the solicitor sitting in his office chair engaged in the task of preparing the case for trial, and to use the words of Sachs J in Francis v Francis and Dickerson 'in particular care must be taken not to be affected by what is colloquially known as 'hindsight'.' The question of the necessity for or propriety of any Item of costs should be judged by the state of things known or which ought reasonably to have been known to a diligent solicitor at the time when the expenditure was made or the liability therefore was incurred."
"The taxing officer should place himself in the position of the solicitor sitting in his office chair engaged in the task of preparing the case for trial, and to use the words of Sachs J in Francis v Francis and Dickerson 'in particular care must be taken not to be affected by what is colloquially known as 'hindsight'.' The question of the necessity for or propriety of any Item of costs should be judged by the state of things known or which ought reasonably to have been known to a diligent solicitor at the time when the expenditure was made or the liability therefore was incurred."
"The taxing officer should place himself in the position of the solicitor sitting in his office chair engaged in the task of preparing the case for trial, and to use the words of Sachs J in Francis v Francis and Dickerson 'in particular care must be taken not to be affected by what is colloquially known as 'hindsight'.' The question of the necessity for or propriety of any Item of costs should be judged by the state of things known or which ought reasonably to have been known to a diligent solicitor at the time when the expenditure was made or the liability therefore was incurred."
"The taxing officer should place himself in the position of the solicitor sitting in his office chair engaged in the task of preparing the case for trial, and to use the words of Sachs J in Francis v Francis and Dickerson 'in particular care must be taken not to be affected by what is colloquially known as 'hindsight'.' The question of the necessity for or propriety of any Item of costs should be judged by the state of things known or which ought reasonably to have been known to a diligent solicitor at the time when the expenditure was made or the liability therefore was incurred."
"The taxing officer should place himself in the position of the solicitor sitting in his office chair engaged in the task of preparing the case for trial, and to use the words of Sachs J in Francis v Francis and Dickerson 'in particular care must be taken not to be affected by what is colloquially known as 'hindsight'.' The question of the necessity for or propriety of any Item of costs should be judged by the state of things known or which ought reasonably to have been known to a diligent solicitor at the time when the expenditure was made or the liability therefore was incurred."
a. the order for costs made by the Administrative Appeals Tribunal on 23 June 2003 only entitles the applicant to recover costs in respect of matter N2001/750.
b. nothing in paragraph (a) prevents the Administrative Appeals Tribunal from determining whether the applicant is entitled to recover the whole or any amount in respect of costs of any Item claimed which was relevant to matter N2001/750, notwithstanding that such Item may also have been relevant to matter N2002/730.
"The taxing officer should place himself in the position of the solicitor sitting in his office chair engaged in the task of preparing the case for trial, and to use the words of Sachs J in Francis v Francis and Dickerson 'in particular care must be taken not to be affected by what is colloquially known as 'hindsight'.' The question of the necessity for or propriety of any Item of costs should be judged by the state of things known or which ought reasonably to have been known to a diligent solicitor at the time when the expenditure was made or the liability therefore was incurred."
"The taxing officer should place himself in the position of the solicitor sitting in his office chair engaged in the task of preparing the case for trial, and to use the words of Sachs J in Francis v Francis and Dickerson 'in particular care must be taken not to be affected by what is colloquially known as 'hindsight'.' The question of the necessity for or propriety of any Item of costs should be judged by the state of things known or which ought reasonably to have been known to a diligent solicitor at the time when the expenditure was made or the liability therefore was incurred."
"In determining whether an Items of costs is "necessary" or "proper" the taxing officer would have regard to the facts in issue between the parties to the litigation as disclosed by the pleadings and to all facts which render probable the existence or non-existence of the facts in issue, .... But in making his decisions upon such matters the taxing officer should place himself in the position of the solicitor sitting in his office chair engaged in the task of preparing the case for trial and, to use the words of Sachs J in Francis v Francis and Dickerson (380, "in particular care must be taken not to be affected by what is colloquially termed 'hindsight' ..."
"As the decision under review in matter N2002/730 was affirmed, and as the Tribunal could not award costs in that matter, there is no bill of costs for me to review. Pursuant to section 67(8) of the Act Ms Keen is not entitled to costs in matter N2002/730. I have no discretion which I can exercise in this matter."
a. the order for costs made by the Administrative Appeals Tribunal on 23 June 2003 only entitles the applicant to recover costs in respect of matter N2001/750.
b. nothing in paragraph (a) prevents the Administrative Appeals Tribunal from determining whether the applicant is entitled to recover the whole or any amount in respect of costs of any Item claimed which was relevant to matter N2001/750, notwithstanding that such Item may also have been relevant to matter N2002/730."
"b. nothing in paragraph (a) prevents the Administrative Appeals Tribunal from determining whether the applicant is entitled to recover the whole or any amount in respect of costs of any Item claimed which was relevant to matter N2001/750, notwithstanding that such Item may also have been relevant to matter N2002/730."
"One possible injustice in this scheme has been shown by the present case. That is where, as here, the party entitled to costs is an individual who does not have the benefit of his or her own input tax credits against which to offset the GST which he or she is liable to pay to their solicitors. A business conducting litigation which recovers costs, will have already had the benefit of being able to net off the payment of GST it was obliged to make to the suppliers of taxable supplies, including solicitors for legal services in connection with the business, against receipts of GST which the business will have obtained from its own supplies of goods or services. Individuals who are not conducting a business will not be able to effect that accounting and taxation consequence and will, to that extent, be worse off when receiving the benefit of an order for costs under the current provisions of the rules. However, that is a matter for the rules committee to address and is not one which the court can recognize in a case like the present.
Accordingly, there was no error in the decision of the Tribunal in this respect."
"1. The power to award costs in these proceedings comes not from the Administrative Appeals Tribunal Act ('the AAT Act'), but from s. 67 of the Safety, Rehabilitation and Compensation Act ('the SRC Act'), which enlivened the Tribunal's power to award costs in the original 2001 proceedings.
2. Section 69A of the AAT Act covers the taxation of costs, not just cases of this type, but in all cases before the Tribunal.
3. At the taxation of this matter before the Registrar, part of the costs allowed were in relation to the preparation and taxation of the bill of costs. These costs were allowed and indeed the respondent does not seem to suggest that such costs should not be allowed. The costs were allowed as being a reasonable and necessary cost in the original (2001) proceedings, pursuant to s. 67 of the SRC Act.
4. The appeal from the Registrar's decision is as much a part of the costs of the original proceedings as was the taxation before the Registrar. That is, they are a necessary part of the 2001 proceedings and are payable as part of those proceedings.
5. This analysis is further strengthened by looking at s 69A(1) of the AAT Act. This allows the Tribunal itself to tax costs (s 69A(1)(c)). Clearly, the applicant would be entitled to costs if this procedure were undertaken by the Tribunal. That the Tribunal, procedurally, chose to have the original taxation undertaken by a Registrar is irrelevant. If the applicant would be entitled to costs of the taxation before the Tribunal at first instance, there is no reason why she should not be entitled to those costs on an appeal pursuant to the same section.
6. The fact that the appeal from the Registrar's decision was given a new proceedings number by the Registry of the Tribunal is a matter of the Tribunal's procedure only and does not change the character of the proceedings. Thus this fact does not disturb the applicant's entitlement to costs of the appeal as part of the original proceedings.
"1. The proceedings currently before the Tribunal (N2005/293) are separate and different to the previous proceedings between the parties which were before the Tribunal.
2. The proceedings currently before the Tribunal are not a review of a decision by the respondent under the provisions of the Safety, Rehabilitation and Compensation Act 1988.
3. The current proceedings by the applicant seek a review of a decision of a Taxing Registrar of the Tribunal.
4. The Tribunal's power in these proceedings to review the decision comes from section 69A of the Administrative Appeals Tribunal Act 1975 (AAT Act).
5. Section 69(2) (sic) of the AAT Act provides:
the Registrar, a District Registrar or a Deputy Registrar has taxed under paragraph (1)(d) the amount to be paid to a party to a proceeding by another party to the proceeding, either of those parties may apply to the Tribunal for review of the amount so taxed.
6. There is simply no provision in the AAT Act to award costs of those proceedings brought pursuant to the AAT Act.
7. This of course is a submission that should not take the applicant by surprise. At the initial telephone conference between the parties and Registrar Shepherd of the Tribunal on 12 May 2005, the Registrar raised the fact that the proceedings were brought pursuant to s69A of the AAT Act and indicated his opinion that the applicant would not be entitled to costs of the application even if successful.
(a) the Tribunal has, under this Act or any other Act, ordered a party to a proceeding to pay to another party to the proceeding reasonable costs incurred by the other party; and
(b) the parties are unable to agree as to the amount of those costs;
the President may give such directions as he or she thinks appropriate for the costs:
(d) to be taxed by the Registrar, a District Registrar or a Deputy Registrar.
(2) If the Registrar, a District Registrar or a Deputy Registrar has taxed under paragraph (1)(d) the amount to be paid to a party to a proceeding by another party to the proceeding, either of those parties may apply to the Tribunal for review of the amount so taxed.
(3) If such an application is made, the Tribunal must review the amount taxed and may:
(b) set aside the amount and substitute another amount; or
(c) set aside the amount and remit the matter to the Registrar, District Registrar or Deputy Registrar, as the case may be, to be taxed in accordance with the directions of the Tribunal.
(4) An amount that a party to a proceeding is required under an order made by the Tribunal to pay to another party to the proceeding is recoverable by the other party as a debt due to the other party by the first-mentioned party."
"... therefore the Tribunal should approach the question of costs without any presumption as to beneficial legislation or that an Applicant by the mere fact of having a reviewable decision varied or set aside is entitled to full or indeed any costs. There is nothing new in the concept that for good and sufficient reasons a successful litigant can be deprived of his or her costs."
I certify that the 607 preceding paragraphs are a true copy of the reasons for the decision herein of Ms G Ettinger, Senior Member
Signed: .....................................................................................
Date of Hearing Submissions in Writing, May 2007; Directions Hearing 31 August 2007
W. & A. Gilbey Ltd
Continental Liqueurs Pty Limited
Comcare v Labathas [1995] FCA 1702; (1995) 61 FCR 149
Re Keen and Deputy Registrar of the Administrative Appeals Tribunal [2005] AATA 1171; (2005) 89 ALD 595
Hronopoulos v Telstra Corporation Ltd [2002] AATA 625
(1995) 61 FCR 149