ZKS v ZKT

​ REASONS FOR DECISION 1 In August 2018, the NSW Civil and Administrative Tribunal (NCAT) made a financial management order in respect of 90-year-old ZKT (the subject person), committing her estate to the management of the NSW Trustee and Guardian (the Trustee). On 7 December 2018, her brother, ZKS, (the appellant) lodged a notice of appeal against that decision. In addition, on the same day he applied for a stay of the operation of that decision. 2 Two hours before the hearing on 13 December 2018, to determine the application for a stay of the decision under appeal, the appellant notified NCAT of his decision to withdraw the appeal. The appellant apparently notified the Trustee of that decision after receiving the Trustee's submission opposing the stay on 12 December 2018. 3 At the hearing on 13 December 2018, I made orders dismissing the appeal under s 55(1)(a) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act). At that hearing the Trustee sought an order for costs. 4 At my invitation, both parties made written submissions about the Trustee's application for costs. I decided to determine that application "on the papers" because both parties consented to that and I was satisfied that the issues could be adequately determined by considering the parties' written submissions: s 50 of the NCAT Act. 5 For the reasons that follow, I have decided to order that the appellant pay the costs incurred by the Trustee in relation to his application for a stay of the operation of the decision under appeal. Decision under appeal 6 The trigger for the initiating application made by the appellant to NCAT for a financial management order, was the decision made by the subject person's bank to suspend the subject person's account. Apparently, that decision was taken because the bank had formed the view that the power of attorney made by the subject person in 2016 appointing her brother as attorney, had become ineffective because she was "incommunicative" and unable to give instructions. As a consequence of the suspension of the account, dividend income could not be paid into the subject person's account and money could not be withdrawn. 7 Being satisfied that the pre-conditions to making a financial management order were met, the Tribunal decided to exercise the power to make a financial management order in respect of the subject person: s 25G of the Guardianship Act 1987 (NSW). The Tribunal then addressed who should be appointed as the subject person's financial manager. The Tribunal decided not to appoint the appellant because of what it considered to be the potential for conflict between his interests and those of the subject person. In making that decision, the Tribunal referred at [15] to the appellant's statement that the "principal objective in seeking a financial management order is to allow the loan which he believes [the subject person] wishes to make to him to be made": Re ZKT [2018] NCAT (unreported, A R Boxall, M J Staples, R Royer, 22 August 2018). 8 In the notice of appeal lodged with NCAT on 6 December 2018, the central ground relied upon by the appellant was the Tribunal's purported failure to afford him procedural fairness. The appellant claimed that throughout the course of the hearing, the Tribunal subjected him to "virtually constant or extensive interruptions", so much so that he was "overborne", unable to make submissions and prevented from handing up a document signed by the subject person, which he asserted established that the subject person understood and had ratified his dealings with the bank. 9 In answer to directions made by the Appeal Panel (differently constituted) on 7 December 2018, both parties filed submissions in respect of the appellant's application for a stay of the decision under appeal. 10 Referring to the power to stay the operation of a decision conferred by s 43 of the NCAT Act, the Trustee pointed out that the appellant had failed to address in his submissions why a stay was necessary to "secure the effectiveness of the determination of the appeal". The Trustee suggested that the appellant may have commenced the appeal for a "collateral purpose" - namely to stop or delay the Trustee's investigation into a series of withdrawals, totalling $190,000 from the subject person's bank account over the five months to April 2018. The Trustee pointed out that the appellant was yet to respond to its request for information about these withdrawals. The Trustee asserted that staying the operation of the decision under appeal may jeopardise the subject person's estate. 11 In submissions in support of his application for a stay, the appellant elaborated on the basis for his claim that he had been denied procedural fairness. He asserted that the appeal would be useless if the orders made by the Tribunal are "enforced" before the determination of the appeal. He wrote that he lacks the ability to pay any "enforcement orders". It is unclear what he meant by that term. Power to award costs 12 Section 60 of the NCAT Act creates the general rule that each party to proceedings is to pay their own costs: s 60(1). An Appeal Panel may only order costs "if satisfied that there are special circumstances warranting an award of costs (emphasis added)": s 60(2). Section 60(3) sets out a non-exhaustive list of factors that may be considered in deciding whether there are special circumstances warranting an award of costs: (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. 13 The term "special circumstances" is not defined by 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. (See eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [23]-[31]; Nguyen & Anor v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen & Anor (no 2) [2016] NSWCATAP 168 at [16].) Submissions in respect of costs 14 The Trustee contends that an order for costs is warranted for the following reasons. 15 First, it was necessary and appropriate that it oppose the application for a stay of the decision under appeal because of its concerns that a stay might jeopardise the subject person's estate and thwart its investigation into the $190,000 withdrawn from her bank account. 16 Second, the Trustee points out that without a costs order, the costs it incurred in defending the application for a stay of the operation of the decision under appeal will be borne by the subject person, as permitted by cl 10 of the NSW Trustee and Guardian Regulation 2017 (NSW). The Trustee asserts that it would be unfair if this occurred. 17 Third, the Trustee points to the appellant's delay in commencing the appeal. The appeal was lodged 11 weeks out of time. 18 Fourth, the Trustee points out that the appellant is a retired barrister and asserts he should "be held to a higher standard than an unsophisticated self-represented litigant". 19 Not surprisingly, the appellant opposes the application for costs. 20 He contends, first, that the Trustee has failed as required by s 60(2) of the NCAT Act to identify circumstances which are "out of the ordinary". 21 Second, he rejects the proposition that the appeal was misconceived, citing a number of authorities in support of his contention that he had been denied procedural fairness. 22 Third, he rejects the assertion that the fact that he was a legal practitioner is relevant to the determination of the appeal, arguing that the rule of law demands that the law be applied equally regardless of the status of the parties. Should an order for costs be made? 23 I must decide whether the factors relied upon by the Trustee, separately or in combination, establish special circumstances warranting an award for costs in this appeal. 24 The gravamen of the Trustee's submission in support of its application for costs is that the appeal was misconceived. In addition, the Trustee suggests that the appeal may have been brought for collateral purposes. 25 I reject the Trustee's contention that on the available material the appeal could be characterised as misconceived. In determining the appeal, the Appeal Panel would be required to make an evaluative judgement as to whether, as the appellant claims, he was denied a reasonable opportunity to present his case as a consequence of being constantly interrupted by the Tribunal when attempting to make submissions. That claim could only be determined after examining the transcript and/or sound recording of the proceedings. When the stay application was made, apparently neither the transcript nor sound recording were available. It would be premature to dismiss this ground as misconceived, until such time as that examination occurred. 26 The Trustee suggests that the appellant may have bought the appeal for collateral purposes, namely to prevent or at least to delay the Trustee's investigation into the series of withdrawals from the subject person's account throughout 2018/2019. If the inference could reasonably be drawn that the appellant had used the appeal for that purpose, that may support a conclusion of special circumstances. However, on the basis of the Trustee's bald assertion, in my view it would be unsafe to impugn the motives of the appellant in bringing the appeal. 27 Nonetheless, while I am not satisfied that the appeal was misconceived or brought for a collateral purpose, I have concluded that the prospects of success of the application for a stay was at best tenuous. As pointed out by the Trustee, the appellant failed to address a key issue relevant to the exercise of the power to grant a stay, namely whether it was "appropriate to secure the effectiveness of the determination of … the appeal": s 43(3) of the NCAT Act. In addition, he failed to provide an explanation for his decision to withdraw the application for a stay at the eleventh hour. The combination of these two factors leads me to be satisfied that there are special circumstances warranting an award of costs. 28 I have decided it is appropriate to exercise the power to order that the appellant pay the Trustee's costs of opposing the application for a stay of the decision under appeal but not any other costs it incurred in the appeal. Orders (1) A hearing on the application for costs is dispensed with under s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW). (2) The appellant must pay the costs incurred by the Trustee in opposing the application for a stay of the decision under appeal, as agreed or assessed.