Zreika v Commissioner of Police

Costs in the Tribunal

1. Section 60 of the Civil and Administrative Tribunal Act 2013 (CAT Act), which governs costs, provides: 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 in 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 other wise 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. …

CONSIDERATION

1. Section 60(1) of the CAT Act establishes that the default position is that each party is to pay its own costs of proceedings before the Tribunal. Nonetheless, by s 60(2), the Tribunal has a discretionary power to depart from that general rule and may award costs but only if it is satisfied that there are special circumstances warranting an award of costs. In Kurmond Homes Pty Ltd v Spiteri [2015] NSWCATAP 48 at [9], SM Titterton said: The meaning of "special circumstances" can be summarised simply: for special circumstances to be established, it suffices that the circumstances are out of the ordinary; they do not have to be extraordinary or exceptional.
2. It does not follow though that where one or more of the factors in s 60(3) are made out, that a costs order should necessarily be made: Obieta v Australian College of Professionals Pty Ltd [2014] NSWCATAP 38 at [81]. The Tribunal's exercise of the discretion provided in s 60(2) of the CAT Act involves a two-stage structured process, namely a consideration of whether or not the Tribunal is satisfied that there are special circumstances in relation to the question of costs, and, if so, whether those special circumstances warrant departing from the general rule and making an award of costs: Hamid v Commissioner of Police, New South Wales Police Force [2018] NSWCATAD 93 at [23].
3. When exercising that power the Tribunal may have regard to the matters expressly identified by s 60(3)(a) to (f) and, by s 60(3)(g), to "any other matter that the Tribunal considers relevant". I therefore turned to consider each of those matters in order to determine if there are special circumstances.
4. The Commissioner made no specific contentions regarding the criteria in s 60(1), contending only in general terms that there are special circumstances which warrant the making of an order for costs. The Commissioner's submissions focussed largely on the Tribunal's ability to award lump sum costs.

Did the Applicant conduct the proceedings in a way that unnecessarily disadvantaged the Commissioner in the proceedings?: s 60(3)(a)

1. The Commissioner did not specifically raise this as a basis on which special circumstances apply, although was critical of the way the Applicant had conducted the proceedings in circumstances where the Commissioner had invited the Applicant to withdraw the application on 21 January 2021, but chose to make no response, sought an adjournment, and then unexpectedly, withdrew his Application for Review.

Was the Applicant responsible for prolonging unreasonably the time taken to complete the proceedings?: s 60(3)(b)

1. The Application for Review was filed on 1 April 2020. As noted above, the hearing of the substantive matter was delayed because the Respondent sought confidentiality orders over some of the evidence, and the matter could not be heard until that matter was determined. There was no evidence that the matter was delayed at all by the Applicant.

What were 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?: s 60(3)c)

1. The Commissioner submitted in the substantive proceedings that it was contrary to the public interest that the Applicant continue to hold a firearms licence because the Applicant is married to the sister of a person who has been involved in serious criminal activity. Other members of his wife's family also have significant criminal records. His wife's family was regarded as a "family crime network". Some members are the subject of orders under s 5(1) of the Crimes (Serious Crimes Prevention Orders) Act 2016 which, amongst other things, limit with whom they may associate.
2. The Statement of Reasons prepared following the internal review recorded: … it is well-known that, to assist their criminal activities, persons of criminal persuasion often seek to make use of licence holders who have minimal or no criminal records, either by purchasing ammunition or storing firearms on their behalf, or by allowing them access to firearms.
3. The Commissioner contended that the Applicant has close family relationships with persons whose conduct is cause for serious concern regarding access to firearms and ammunition, which in turn raises serious concerns regarding the Applicant's own access to firearms and ammunition.
4. The Applicant refuted the contention and denied that he had ever lived with his brother-in-law or with other family members. He interacts with the family in the course of his familial duties with his wife, and not otherwise. Some of the family members involved in serious criminal activity do not have criminal convictions relating to firearms. The Applicant has not spoken to, met or interacted with another of the persons to whom the Commissioner referred, who had been convicted of supplying a firearm that was used in a murder. It was submitted on his behalf that, other than the "extremely peripheral connection arising from a family relationship with the [crime family] through marriage" it was not demonstrably contrary to the public interest for the Applicant to continue to hold a firearms licence. The Applicant did not provide any evidence in relation to these matters.
5. The Commissioner submitted that a reasonable inference is that the Applicant elected to withdraw because he did not want to give oral evidence and/or be subject to cross-examination. It was submitted that this is a matter which is independent of the issue of the Applicant's residency and was likely to have been known to him from the outset. While that may be a reasonable inference, it is not one I am prepared to make.
6. Putting these matters to one side, there is the threshold issue of whether the Applicant met the residency requirements of s 11(3)(d) of the FA Act. Section 11(3)(d) provides that a licence must not be issued unless the Commissioner is satisfied that the person to whom the licence is to be issued is a resident of this State or is about to become a resident of this State.
7. There was no evidence in support of the assertion that the Applicant had recently twice sought to have his NSW drivers licence reinstated but had been refused. Section 28 of the Road Transport Act 2013 provides that a licence is not to be issued unless the person is resident in NSW, nor can a licence be renewed if the person is no longer resident in NSW. In any event, it is implausible that, having gone to the trouble of obtaining his Queensland drivers licence, the Applicant then sought to surrender it and obtain a fresh licence in NSW. In any event, the Applicant told Police on 11 December 2020 that he was moving to Queensland for work. It was asserted on his behalf that he had moved to Queensland in an effort to distance himself from his extended family. I agree with the submissions on the Applicant's behalf that these propositions are not mutually exclusive, but it remains that he had moved or was in the process of moving to Queensland, and hence was not a resident of NSW.
8. That being the case, the Applicant's prospects of success in the matter were poor, irrespective of whether the concerns of Police about the Applicant's family connections and the contended "well-known belief" that persons of criminal persuasion often seek to make use of firearms licence holders who have minimal or no criminal records.
9. Whether or not the Applicant was aware that he was creating "a jurisdictional issue" by moving to Queensland is irrelevant.

The nature and complexity of the proceedings: s 60(3)(d)

1. While the issue of the connection between the Applicant and criminal members of his extended family and associates and the effect on the consideration of the public interest in s 24(d)(2) of the FA Act is multifaceted, the threshold issue of the Applicant's residency is not.

Are there any other relevant matters?: s 60(3)(g)

1. It was submitted that the Applicant's conduct, in particular, his sudden withdrawal of his application, has resulted in undue waste of time and resources by the Commissioner.
2. I accept that the extensive documentation and evidence filed on behalf of the Commissioner (including confidential material) caused the Commissioner to spend significant time and money in preparing the matter for hearing. That process involved, inter alia, reviewing documents to determine their relevance and whether they should be subject to a confidentiality order, conferring with an instructing officer and DSC McLean, obtaining various affidavits from DSC McLean and the filing of documentation for an interlocutory hearing and conducting that hearing. Had the matter proceeded to hearing on the substantive issue in relation to public interest, in all likelihood the usual rule that each party pays its own costs would have applied.
3. Instead, the Applicant's solicitor was put on notice from 21 January 2021 that it had come to the Commissioner's attention that the Applicant had become a resident of Queensland, and that, as a result, the Applicant was invited to withdraw his application. When no response was received, neither by the deadline of 5pm the following day, nor at all, the Commissioner's representative had no reasonable alternative but to fully prepare the matter for hearing on 4 February 2021. There was ample time before the hearing for the Applicant to prepare an affidavit dealing with the issue of his residency, if the Applicant proposed to dispute at the hearing the contentions raised in the letter of 21 January 2020. In those circumstances too, in all likelihood, the usual rule that each party pays its own costs would have applied.
4. I was referred to Rae v Commissioner of Police, NSW Police Force (No 3) [2010] NSWADT 254 in relation to costs on withdrawal, although I observe in that in that matter there had also been a failure to comply with directions and the rejection of offer of settlement.

Conclusion in relation to special circumstances

1. Taking all the above matters into consideration I find that the circumstances in this matter are sufficiently special to consider the award of costs, in departure from the usual rule.

Should the Tribunal exercise its discretion to make an order as to costs?

1. Being satisfied that special circumstances exist, the question that then arises is whether the discretion given to the Tribunal to make an order for costs should be exercised: Andrew Kennedy Funeral Directors Pty Ltd v Commissioner of Fair Trading [2020] NSWCATAD 195 at [15]. The fact that some factors are made out does not necessarily mean that a costs order should be made. As the Appeal Panel observed in eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48] [T]he discretion to award costs must be exercised judicially and having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs. Each situation must, of course, be assessed on a case by case basis to see whether or not special circumstances exist so as to warrant the award of costs.
2. The Commissioner submitted that the costs associated with the preparation for hearing and all prior costs incurred by the Commissioner in this matter have been thrown away as a result of the Applicant's sudden withdrawal (my underlining). I do not agree. Up until the information received in relation to the Applicant's apparent move to Queensland, the Respondent was obliged to prepare for the hearing of the matter on the basis of its position that it was not in the public interest for the Applicant to continue to hold a firearms licence.
3. Having found there are special circumstances which warrant an award of costs, I consider that it is appropriate to exercise the Tribunal's general discretion in respect of costs, subject to the discussion below.

Having exercised the Tribunal's discretion to award costs, how should they be quantified?

1. Recently, in The Owners of Strata Plan No 55773 v Roden (Costs) [2020] NSWCATAP 197 the Appeal Panel said at [46]: 46 Having found the proceedings were complex and that "special circumstances" exist to warrant an award of costs, the Tribunal has a general discretion in respect of costs. In these circumstances costs are compensatory and the starting position is that costs should follow the event.
2. The solicitor for the Commissioner provided an affidavit dated 10 February 2021, attached to which was a schedule of work done (with redactions) and expenses associated with the conduct of the matter, dating back to when the Application for Review was filed (the Schedule). Costs totalled over $39,000. Some entries have been redacted, and it is unclear to what activities they refer, and, consequently they have been disregarded. Disbursements (including counsel's fees to 7 July 2020) amounted to $6470.23.
3. It is clear from the Schedule that the vast majority of the costs incurred by the Commissioner preceded 22 January 2021, the deadline for the Applicant to respond to the invitation to withdraw his application. The remaining amount is $2692.32. There was no evidence of disbursements incurred since that time.
4. Section 60(4)(a) empowers the Tribunal to make a fixed sum costs order.
5. Recently, in Anderson v The Owners - Strata Plan No. 61034 (No 2) [2019] NSWCATAP 108 the Appeal Panel stated at [28]: 28. Appeal Panels have recently considered lump sum costs orders in Islam v Metricon Homes Pty Ltd [2018] NSWCATAP 116 and in Zucker v Burbank Montague Pty Ltd [2018] NSWCATAP 13. Reference was made to the principles referred to by the NSW Court of Appeal in Bechara trading as Bechara and Company v Bates [2016] NSWCA 294, which stated, at [12] to [15]: 12. The power to award a lump-sum should only be exercised when the Court considers that it can do so fairly between the parties and where an appropriate sum can be determined from the available materials: Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at 742-723 [21]-[22]; Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 123. 13. 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: Hamod v New South Wales [2011] NSWCA 375 at [818] per Beazley J A (Giles and Whealy JJA agreeing). 14. A "broad brush " approach is appropriate. To require the same or similar level of detail as in a formal costs assessment would defeat the purpose of the lump sum order: Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1; [1999] FCA 673 at 5 [16]; Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121 at [7]. 15. The courts have typically applied a discount in assessing costs on a gross sum basis: Hamod v New South Wales at [814].
6. Applying the "broad brush approach" in Bechara, I consider that the available evidence supports a finding of the appropriateness of a lump sum order of costs in the sum of $2,692.32, being the costs incurred after 22 January 2021.

Conclusion

1. Taking all the above considerations together I am satisfied that there are special circumstances which take this case out of the ordinary or usual case, and warrant a departure from the general principle that each party bear its own costs an order for costs, and exercise the Tribunal's discretion accordingly award costs in favour of the Commissioner in the sum of $2,692.32

Orders 1. The Applicant is to pay the Commissioner's costs in the sum of $2,692.32.

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: 26 March 2021