ZLX v ZLY

Should the application for costs be determined on the papers?

1. The mother and the Separate Representative provided the Appeal Panel with written submissions in support of their applications for costs. Despite being invited to do so, the appellant did not respond to those submissions. (See Order 3 made by the Appeal Panel on 25 June 2019.)
2. Section 50 permits the Appeal Panel to dispense with the requirement to hold a hearing if it is satisfied that the issues for determination can be determined adequately in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Appeal Panel. We invited the parties to comment on our preliminary view that any costs application could be determined "on the papers". In their separate submissions, the mother and the Separate Representative stated that they agreed with that proposed course. Having reviewed those submissions, together with the brief submissions on the issue of costs contained in the appellant's letter to NCAT, dated 25 June 2019, we concluded that the issues raised by the costs applications could be determined adequately by considering the written material provided by the parties.
3. As the pre-condition to the exercise of the discretion to dispense with a hearing is satisfied, it is necessary to decide whether to exercise that discretion. The Appeal Panel is required to take such measures as are reasonably practicable to ensure that the parties have a reasonable opportunity to be heard (s 38(5)(c) of the NCAT Act). The Appeal Panel is also required to seek to give effect to the "guiding principle" of the NCAT Act - to facilitate the just, quick, and cheap resolution of the real issues in the proceedings (s 36(1) of the NCAT Act). In addition, the Appeal Panel is required to facilitate the resolution of the issues in dispute in such a way that the "cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings" (s 36(4) of the NCAT Act).
4. The issues raised by the costs applications are not complex. If a hearing were to be conducted to determine those applications, it is likely that the parties would incur additional costs and the Tribunal would be required to expend additional resources. That additional cost and expenditure is disproportionate to the complexity and importance of the matters raised for determination. For these reasons, we conclude that it is appropriate to make an order dispensing with a hearing.

Proceedings in the Supreme Court

1. To put the submissions made by the costs applicants in context, it is necessary to set out some background facts to the proceedings commenced by the appellant in the Supreme Court.
2. On 25 May 2019, the appellant filed a Summons in the NSW Supreme Court, seeking among other things: 1. An order that the decision made by the Tribunal to appoint the mother as manager of the subject person's estate be revoked. 2. An order that compensation monies awarded to the subject person in settlement of his medical negligence claim be subject to management under the NSW Trustee and Guardian Act 2009 (NSW). 3. An order that Equity Trustees Limited be appointed as manager of the subject person's estate, subject to the orders and directions of the NSW Trustee and Guardian.
3. On 18 June 2019, the appellant's solicitors wrote to NCAT and advised that proceedings had been commenced in the NSW Supreme Court seeking the appointment of a protected estate manager, specifically a corporate trustee, for the subject person. They advised that, if the Court made that appointment at the proceedings listed on 24 June 2019, the appellant intended to withdraw the NCAT appeal.
4. On 24 June 2019, the Supreme Court (Lindsay J) made a series of orders including: 1. That the financial management order made by the Tribunal on 27 March 2019 be revoked. 2. That pursuant to s 41 of the NSW Trustee and Guardian Act, the estate of the subject person is committed to the management of the NSW Trustee.
5. In a notation to those orders, Lindsay J recorded: 1. The appellant and the mother had agreed that the management of the subject person's estate should be committed to the NSW Trustee. 2. The appellant gave an undertaking to the Court to withdraw her appeal in NCAT against the "guardianship order made by the Guardianship Division of NCAT on 27 March 2019…".
6. On 24 June 2019, the appellant gave NCAT a copy of those orders and advised of her decision to withdraw the NCAT appeal. The following day in a letter to the NCAT Registrar, the appellant pointed out that the orders made by the Supreme Court included an order that the costs of the parties in the Supreme Court proceedings (the mother and the appellant) be paid from the estate of the subject person.

Power to award costs

1. 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.
2. 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

1. The Separate Representative and the mother contend that there are special circumstances warranting an award of costs against the appellant for the following reasons.
2. First, the appellant failed to comply with any of the directions made by the Appeal Panel on 9 April 2019. On that day, the Appeal Panel listed the appeal for hearing and directed the parties to file and serve submissions in support of their respective positions on the appeal.
3. Second, after the deadline set by the Appeal Panel for providing submissions in support of the appeal had passed (31 May 2019), the appellant failed to respond to enquiries made by the Separate Representative (5 June 2019) and the mother (7 June 2019 and 13 June 2019), about whether it was her intention to comply with that direction. In compliance with orders made on 9 April 2019, the mother and the Separate Representative each provided written submissions and material in opposition to the appeal.
4. Third, the Separate Representative and the mother assert that the appellant's strategy appears to have been to maintain her NCAT appeal to NCAT with a minimum of prosecution while at the same time pursuing her appeal in the Supreme Court.
5. Third, the appeal was "arguably frivolous or vexatious and lacking in substance", given that the appellant failed to provide submissions in support of the appeal, or to amend the grounds of appeal after the reasons for the decision under appeal were issued to the parties. (The reasons for the Tribunal's decision were issued to the parties after the decisions under appeal were made.)
6. The mother submitted that the appeal lacked substance as there was no basis for the appellant's contention that there had been a denial of procedural fairness (Ground 1 of the appeal). In the Notice of Appeal, the appellant asserted that she had been "ambushed" on the day of the hearing by the production of a letter, dated 7 February 2019, written by a manager employed by the operator of the group home where the subject person had been living. The manager wrote that on two occasions in October 2018, the subject person was admitted to hospital following concerns about significant and unexplained weight loss. The manager repeated allegations apparently made by the mother, to the effect that the appellant was responsible for the subject person's weight loss.

Are special circumstances established?

1. After commencing the NCAT appeal, the appellant also commenced proceedings in the Supreme Court. In each set of proceedings, she sought the revocation of the financial management order made by the Tribunal in March 2019.
2. The appellant was legally represented in both proceedings. She did not seek leave to be excused from the orders made by the Appeal Panel on 9 April 2019, requiring that she file submissions in support of the appeal. Nor did she provide an explanation for failing to comply with that order. In addition, she failed to respond to inquiries made by the Separate Representative and the mother as to whether she intended to comply with that order. Further, she did not inform NCAT until five working days before the hearing of the NCAT appeal that four weeks earlier she had commenced parallel proceedings in the Supreme Court.
3. In compliance with the orders made by the Appeal Panel on 9 April 2019, the Separate Representative and the mother filed submissions and material, opposing the appeal.
4. The costs incurred in complying with that order were unnecessary. It is no argument as we understand the appellant to submit, that the mother was not required to incur two sets of costs as the costs she (and the appellant) incurred in the Supreme Court proceedings were ordered to be paid from the subject person's estate. The fact remained that the costs incurred by the mother in the NCAT appeal were wasted. Those costs may have been avoided if the appellant had informed the Appeal Panel of her decision to commence proceedings in the Supreme Court, or sought to have the orders made by the Appeal Panel on 9 April 2019 varied.
5. The appellant's failure to comply with those orders amounted to a breach of the duty imposed by s 36(3) of the NCAT Act which requires parties to comply with directions and orders of the Appeal Panel. That failure was not a mere transgression. It resulted in the mother and NSW Legal Aid incurring unnecessary costs. The appellant's delay in advising the Appeal Panel that she had commenced proceedings in the Supreme Court and to provide an explanation for her failure to comply with the orders made on 9 April 2019, resulted not only in inconvenience to the Appeal Panel but prejudiced the interests of other parties waiting to have their appeals heard.
6. On the limited material filed in support of the appeal, it is difficult to assess whether, as the Separate Representative and the mother contend, the appeal was vexatious and lacking in substance. However, based on the bald assertions contained in the notice of appeal concerning the purported errors made by the Tribunal, the prospects of the appeal succeeding appear to be remote.
7. We are satisfied that these circumstances, taken in combination, amount to special circumstances, which warrant a departure from the usual rule that parties to proceedings in NCAT are ordinarily required to bear their own costs.
8. We order that the appellant pay the mother's costs of this appeal, as agreed or assessed.

Can an order for costs be made in favour of the Separate Representative?

1. The Separate Representative seeks an order that the appellant pay the costs incurred by Legal Aid NSW in these proceedings.
2. Following orders made by the Appeal Panel that the subject person be separately represented, at the request of NCAT Legal Aid NSW funded a barrister to act as the Separate Representative for the subject person in this appeal. The role of a Separate Representative is explained in the Guardianship Division Guideline, Representation, August 2017: Role of a separate representative 45. The role of a separate representative is different from that of a solicitor acting on instructions. A separate representative is independent and does not act on the instruction of the person they represent. … 48. The role of a separate representative is to make submissions, based on all available information, as to the outcome that the separate representative believes would give paramount consideration to the welfare and interests of the subject person whilst also taking into account the other principles set out in section 4 of the Guardianship Act.
3. The Separate Representative did not address in the submissions he prepared in support of Legal Aid NSW's application for costs, whether the power conferred by s 60 of the NCAT Act permits the Appeal Panel to make an order in favour of a non-party. While the subject person is a party to the appeal, Legal Aid NSW is not.
4. The issue of whether a costs order could be made in favour of Legal Aid NSW was considered by the Tribunal in GZN [2016] NSWCATGD 78. There the Tribunal concluded that the power conferred by s 60 of the NCAT Act did not permit the Tribunal to make an order in favour of a non-party, specifically Legal Aid NSW. While we are not bound by that decision, we find the reasoning of the Tribunal to be persuasive.
5. Because this issue was not addressed by any party, we have decided to give the Separate Representative the opportunity to provide written submissions addressing whether the NCAT Act permits the Tribunal to make an order under s 60 of that Act in favour of Legal Aid NSW.

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 ZLZ's costs, as agreed or assessed. 3. If Legal Aid NSW elects to make submissions about whether the Civil and Administrative Tribunal Act 2013 (NSW) permits the Tribunal to make an order for costs under s 60 of that Act in favour of Legal Aid NSW, it must file and serve written submissions within 14 days of the date of this decision. 4. Any party wishing to respond to any submissions made by Legal Aid NSW must file and serve written submissions within 14 days of any submissions served by Legal Aid NSW.

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: 14 November 2019