YGM v YGN

NCAT Appeal Panel|2024-06-05|Before: Foreman AM

REASONS FOR DECISION

In May 2017, Angela made an enduring power of attorney appointing one of her four children, Kim, and daughter-in-law, Margaret, as her attorneys (the EPoA). In June 2023, Angela's son, Doug, made an application to the Guardianship Division of the NSW Civil and Administrative Tribunal (respectively, the "Guardianship Division" and "NCAT") and requested the Tribunal to exercise its power to remove Kim as attorney. Following review of the EPoA, the Tribunal declined to exercise that power or to make any other orders under s 36(4) of the Powers of Attorney Act 2003 (NSW).
On 22 February 2023, we dismissed an appeal brought by Doug from the Tribunal's decision: YGM v YGN [2024] NSWCATAP 14. Subsequently, Kim, the second respondent to the appeal, applied for an order that Doug pay her costs of the appeal on an indemnity basis (the costs application). Another of Angela's sons, Ted, the fourth respondent to this appeal, supports that application. Unsurprisingly, the costs application is opposed by Doug.
Kim and Doug were the only parties legally represented in the appeal.
We decided to hear this application "on the papers", that is, without a hearing because we are satisfied that the issues can be adequately determined by considering the parties' written submissions: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 50. Doug, Ted and Kim agree.
To exercise the power to award costs we must be satisfied that are there "special circumstances" warranting an award of costs. For the reasons that follow, we are not persuaded that special circumstances are established.

Statutory framework: s 60 of the NCAT Act

Section 60 of the NCAT Act states: 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.
Section 60(1) of the NCAT Act creates the general rule that each party is to pay their own costs. Section 60(2) gives the Tribunal power to award costs upon it being "satisfied that there are special circumstances warranting an award of costs". Section 60(3) sets out a non-exhaustive list of factors the Tribunal may have regard to in deciding whether there are special circumstances warranting an award of costs.
In Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81, the NSW Court of Appeal considered the meaning of the term "special circumstances" in s 88(1) of the now repealed Administrative Decisions Tribunal Act 1997 (NSW). While in different terms to s 60 of the NCAT Act, like that provision s 88(1) of the Administrative Decisions Tribunal Act gave the Tribunal power to award costs "but only if it is satisfied that there are special circumstances warranting an award of costs". At [60], Santow JA held (and Mason P and Brownie AJA agreed) that the Tribunal was in error in failing to conclude that special circumstances were established. Santow JA observed: "[I]t suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional". That statement has consistently been applied by NCAT: see for example, Gelder v The Owners - Strata Plan No 38308 [2021] NSWCATAP 109 at [12]; Youssef v NSW Legal Services Commissioner (Costs) [2020] NSWCATOD 115 at [107]; James v Department of Justice (Corrective Services NSW) (No 2) [2022] NSWCATAP 216 at [6].
More recently, in Kaye v The Owners - Strata Plan No 4350 [2022] NSWSC 1386, Basten AJ at [70] commented that the term "special circumstances" in s 60 of the NCAT Act: "[I]s not a term of art. Its scope and operation will depend heavily on the context in which it appears. A particular circumstance which appears to be special in one case may not be so in another. It is not a phrase which readily gives rise to appellate explication."

Responsible for prolonging unreasonably the time taken to complete the proceedings (NCAT Act, s 60(3)(b))

Kim contends that despite the narrow scope of issues required to be determined in the appeal, Doug filed a large amount of material which was "unnecessary and distracting".
Doug disputes that claim. He points out that the 145 pages of documents he filed in the appeal largely consisted of the material that had been filed in the proceedings before the Tribunal and the transcript of those proceedings. That material was necessary to enable the Appeal Panel to properly consider his submissions. In contrast, the respondent children filed over 500 pages of documents.
Doug submits that the hearing was "inevitably extended" because of the number of parties to the appeal which included each of Angela's four children. Nonetheless, despite all parties being given an opportunity to be heard, the appeal was determined in three hours.

Consideration

The real complaint made by Kim appears to be that she was put to the unnecessary expense and time of reviewing "unnecessary and distracting" documents filed by Doug in the appeal; not that the volume and type of documents unnecessarily prolonged the time to complete the appeal. In circumstances where much of the material filed by Doug in the appeal was the material that was before the Tribunal and where Doug was directed to file that material if he intended to rely on it (Order 5, 27 September 2023), we reject the contention that the material could be described as "unnecessary and distracting".
The hearing of the appeal ran for the time allocated to that hearing. It is not suggested that Doug's conduct in the appeal caused the hearing of the appeal to be delayed or extended. We are not persuaded that Doug was responsible for prolonging unreasonably the time taken to complete the appeal. Nor are we persuaded that the volume of documents filed by Doug in the appeal constitutes special circumstances warranting an award of costs.

Relative strengths of the claims made by each of the parties (NCAT Act,

s 60(3)(c))

Kim contends that the appeal was "hopeless" because Doug failed to grapple with the "agreed fact" that Angela had been managing her own finances until 2020. The conduct by the attorneys, said by Doug to evidence that that they acted in breach of their fiduciary duties to Angela, occurred between June 2017 and September 2019.
When viewed through the prism of the two grounds ultimately prosecuted in the appeal (YGM v YGN at [9], reproduced at [21] below), Kim says that Doug ought to have known that the appeal was hopeless and that there was no reasonable prospect of success.
Doug disagrees. He points to the competing evidence about Angela's capacity to independently manage her financial affairs between 2017 and 2020 referred to by the Appeal Panel in YGM v YGN at [40]. He highlights the report prepared by an Aged Care Assessment Team which recorded that Angela "was engaged in the assessment [in October 2019] but was confused and demonstrated obvious cognitive impairment": YGM v YGN at [40].
In addition, Doug points out that Angela's capacity was not the only issue he raised in the proceedings before the Tribunal and in the subsequent appeal. He asserts that there was evidence before the Tribunal which, if accepted, was capable of supporting a finding that between June 2017 and September 2019 Kim had acted in breach of her fiduciary obligations to Angela.

Consideration

It puts it too high to assert that it was an "agreed fact" between the parties that Angela was capable of managing her financial affairs until 2020. A better characterisation would be that in the appeal Doug elected not to challenge that finding.
In the notice of appeal, prepared without legal assistance, Doug listed multiple grounds of appeal. Subsequently Doug instructed lawyers and gave instructions to abandon most of those grounds and to focus on two questions: "(1) in considering whether or not it was in Angela's best interests to make orders under s 36(4) of the Powers of Attorney Act, whether the Tribunal erroneously confined its enquiry to Kim's conduct in the use of the EPoA, and (2) if not, whether the Tribunal's finding that there was an 'absence of evidence of any mismanagement, maladministration or conflict of interest on the part of the attorneys' constituted 'an injustice which is reasonably clear' and a "factual error unreasonably arrived at". (See, YGM v YGN at [9])
Had Doug prosecuted the original grounds listed in the notice of appeal we would agree that the appeal was hopeless. The revised grounds, while not strong, were arguable.

The appeal was vexatious (NCAT Act, s 60(3)(e))

Kim contended that the appeal was not only misconceived but vexatious because: 1. The appeal was the fifth set of proceedings in NCAT in which Doug raised the same allegations about the attorneys in various forms. 2. Doug prosecuted the appeal and the original proceedings in the Guardianship Division on the basis that the attorneys took advantage of Angela between June 2017 and September 2019, when she was said to be frail and on the "cusp of capacity". In contrast, in proceedings in NCAT's Consumer and Commercial Division, Doug argued that Angela had capacity to enter into a residential tenancy agreement with him in May 2020. These inconsistent claims justify a costs order. 3. Doug delayed seeking review of the EPoA until January 2023 by which time Angela had lost decision-making capacity, depriving the Tribunal of the opportunity to hear from Angela directly.
Ted agrees that the appeal was vexatious. He contends that Doug's application seeking review of the EPoA rested on a "fundamental and extraordinary inconsistency". On the one hand, Doug readily accepted Angela's decision to give him $41,000 in July 2017 and to purportedly enter into a residential tenancy agreement with him in May 2020. On the other hand, Doug challenged Angela's capacity to make a series of decisions between June 2017 and September 2019 which he contended favoured his siblings, and Kim in particular.
Ted contends that the delay in challenging the attorney's actions brings into question the genuineness of his concerns about the attorneys' alleged impropriety and his professed concern for Angela.
According to Ted, Doug's actions in applying to NCAT for review of the EPoA and, when unsuccessful, appealing the Tribunal's decision, must be seen in the context of the history of Doug being aggressive towards and making threats to the attorneys.
Doug contends that the appeal was not vexatious. He points out that the attorneys initiated the four sets of proceedings said by Kim and Ted to evidence that this appeal was vexatious. Each of those proceedings related to Doug's occupancy of the family home and were conducted in the Consumer and Commercial Division or involved an appeal from that Division (the CCD proceedings).
Further, Doug asserts that his case was not solely based on Angela's capacity to manage her finances. Rather, he had relied on evidence that Kim had failed to comply with her fiduciary duties by seeking to gain a benefit from Angela, and by permitting her interests and those of Angela to come into conflict during a period that Angela was both frail and vulnerable.
As the assertion that his application seeking review of the EPoA was delayed and designed to prevent Angela's position being considered by the Tribunal, he points out that one week before the first directions hearing in the proceedings in the Guardianship Division, the attorneys removed Angela from the family home after which Angela never spoke again.

Consideration

Undoubtedly, there is a troublingly inconsistency between Doug's actions in challenging Angela's capacity to make a series of loan decisions he considered to be favourable to Kim and his siblings between 2017 and 2019 (the loan decisions) and his actions in accepting the benefits of decisions made or purportedly made by Angela during and after that period. Had there been no evidence to support a finding that Angela lacked capacity to make the challenged decisions, or that the attorney had some involvement with those decisions, the submission that the appeal was vexatious would be compelling.
It is not to Doug's credit that in the CCD proceedings he asserted that Angela had capacity to enter into a residential tenancy agreement in May 2020, especially given that six months earlier he had expressed the opinion that Angela was "unable to make legally-binding decisions": Latimer v Latimer [2022] NSWCATAP 94.
However, the question we must decide is not whether Doug is a person of good character or in defending the CCD proceedings he was motivated by self-interest. Rather, the question we must decide is whether the appeal brought by Doug from the decision of the Guardianship Division not to revoke the appointment of the attorneys was vexatious. It is apparent that Doug feels aggrieved by several decisions made by the attorneys, and Kim in particular, including the decision to evict him from the family home and to remove Angela from his care. Equally, it is apparent that Doug feels aggrieved by the loan decisions, which he believes disproportionately advantaged Kim. While it is possible, we could not be satisfied that the appeal was brought by Doug solely or primarily for the collateral purpose of "settling a score" with the attorneys. We may have reached a different opinion had the appeal been so "obviously untenable or manifestly groundless as to be utterly hopeless" (Attorney-General v Wentworth (1988) 14 NSWLR 481 at 491).
Finally, as to the claim that there is a history of Doug being aggressive towards and making threats to the attorneys, neither the Tribunal nor the Appeal Panel has made findings about those claims.
We are not persuaded that that the factors on which Angela and Ted rely, alone or cumulatively, constitute special circumstances warranting an award of costs.

Orders

The application for costs made by the second respondent is refused.

Annexure A Party Pseudonym Fictitious name Appellant YGM Doug First Respondent YGN Angela Second Respondent YGO Kim Third Respondent YGP Margaret Fourth Respondent YGQ Ted Fifth Respondent YGR Mark Sixth Respondent NSW Trustee and Guardian

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: 05 June 2024

Administrative Decisions Tribunal Act 1997(NSW)

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