Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Barsoum v Chief Commissioner of State Revenue [2021] NSWCATAP 266 Hearing dates: 6 August 2021 Date of orders: 10 September 2021 Decision date: 10 September 2021 Jurisdiction: Appeal Panel Before: Hennessy ADCJ, Deputy President J.S. Currie, Senior Member Decision: 1. Leave to appeal refused. 2. Appeal dismissed. Catchwords: APPEAL – costs – where Tribunal found the applicant's application for review of an administrative decision to be without merit – whether findings amount to special circumstances warranting an award of costs under s 60 of the Civil and Administrative Tribunal Act 2013 - proceedings misconceived or lacking in substance- relative strength of the parties' claims- no tenable basis in fact or law Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), ss 3, 60, 80 (2), Duties Act 1997 (NSW), Chapter 2A, s 104J (2) Foreign Acquisitions and Takeovers Act 1975 (Cth), s 4 Land Tax Act 1956 (NSW), ss 5A, 5B Taxation Administration Act 1996 (NSW), s100 (3) Cases Cited: B&L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] 74 NSWLR 481 Barsoum v Chief Commissioner of State Revenue [2020] NSWCATAD 282 BHP Billiton Ltd v Dunning [2013] NSWCA 421 Collins v Urban [2014] NSWCATAP 17 Cornish Investments Pty Limited v Chief Commissioner of State Revenue [2013] NSWADTAP 25 Cripps & Anor v G & M Dawson Pty Ltd & Anor [2006] NSWCA 81 Fitzpatrick Investments Pty Limited v Chief Commissioner of State Revenue [2015] NSWCATAD 103 Gao v Chief Commissioner of State Revenue [2020] NSWCATAD 216 Groth v Secretary, Department of Social Security [1995] FCA 1708 Haritos v Federal Commissioner of Taxation (2015) 223 FCR 315 Kurmond Homes Pty Ltd v Spiteri [2015] NSWCATAP 48 Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 Obieta v Australian College of Professionals Pty Ltd [2014] NSWCATAP 38 Oshlack v Richmond River City Council (1998) 193 CLR 72 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 Secretary, Department of Family and Community Services v Smith [2017] NSWCA 206 The Owners, Strata Plan No 55773 v Roden (Costs) [2020] NSWCATAP 197 Texts Cited: None cited Category: Principal judgment Parties: Samy Hanna Karmel Barsoum (Appellant) Chief Commissioner of State Revenue (Respondent) Representation: Counsel: D. Lewis (Respondent) Solicitors: Crown Solicitor (Respondent) Appellant in person File Number(s): 2021/00138536 Publication restriction: Nil Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Administrative and Equal Opportunity Division Citation: [2021] NSWCATAD 91 Date of Decision: 14 April 2021 Before: N S Isenberg RFD, Senior Member File Number(s): 2020/00108155 reasons for decision What is this appeal about? 1. Mr Samy Barsoum has brought this appeal from a decision of the Tribunal ("the costs decision") made on 14 April 2021, under which he was ordered to pay the costs of the Chief Commissioner of State Revenue ("the Chief Commissioner"). Those costs were incurred in proceedings in the Revenue List of the Tribunal's Administrative and Equal Opportunity Division. We shall refer to the proceedings concerning costs as "the costs proceedings" and the proceedings in respect of which those costs were incurred as "the substantive proceedings". 2. In the substantive proceedings, Mr Barsoum had sought administrative review of the Chief Commissioner's assessment of his liability for surcharge land tax for the 2017 tax year. The effect of the Tribunal's decision in the substantive proceedings ("the substantive decision") was to affirm the Chief Commissioner's decision to issue that assessment. 3. Before us, Mr Barsoum contended that in reaching the costs decision the Tribunal had fallen into error in deciding questions of law. He also sought leave to appeal on questions other than questions of law. It therefore fell to us to decide: 1. whether Mr Barsoum could bring his appeal as of right, because the Tribunal had made an error in determining a question of law; 2. whether we should grant Mr Barsoum leave to appeal on questions other than questions of law; and 3. what specific orders we should make. 1. We decided that the Tribunal had made no error of law in relation to the costs decision and that there was no proper basis upon which we should grant Mr Barsoum leave to appeal. We therefore refused leave to appeal and dismissed the appeal. These are our reasons for those orders. The surcharge land tax regime 1. The operation of the surcharge land tax regime under the Land Tax Act 1956 (NSW) was central to both the substantive decision and the costs decision. An understanding of the regime and liability under it is important in our determination of the issues which arose on appeal. Liability and "foreign person" 1. The substantive legislative provisions which impose liability for surcharge land tax are found in the Land Tax Act. The provisions relevant to Mr Barsoum's liability for the 2017 tax year are those contained in section 5A. Under s 5A(1): Land tax is payable under this section in respect of residential land owned by a foreign person (surcharge land tax). 1. In the substantive proceedings, there was no dispute that the property the subject of assessment for surcharge land tax was residential property situated in Sydney and owned at all relevant times by Mr Barsoum. 2. The definition which is key to determining liability for surcharge land tax is that of "foreign person". The Land Tax Act as in force during the 2017 tax year, by s 5A(1) imposed surcharge land tax on land owned by a "foreign person" and, by s 5A(6), defined "foreign person" to have the same meaning as in Chapter 2A of the Duties Act 1997 (NSW). In turn, s 104J(1) of that Act, which is within Division 2A, provided that a "foreign person": " means a foreign person within the meaning of the Foreign Acquisitions and Takeovers Act 1975 of the Commonwealth, as modified by this section." (Emphasis added) 1. Under section 4 of the Foreign Acquisitions and Takeovers Act 1975 (Cth), a "foreign person" is an individual not "ordinarily resident" in Australia. Section 5 provides that an individual who is not an Australian citizen is ordinarily resident in Australia at a particular time (and so is not foreign person at that time) if and only if: 1. they had "actually been in Australia" during 200 or more days in the period of 12 months immediately preceding that particular time (which we have referred to as "the 200 days Test"); and 2. at that particular time, either: 1. they were in Australia and their continued presence here was not subject to any time limitation imposed by law, or 2. they were not in Australia, but immediately before their most recent departure from Australia, their continued presence here was not subject to any time limitation imposed by law. Exemption for Australian citizens 1. As contemplated in s 104J(1) of the Duties Act and the underlined words in the quoted extract at [8] above, s 104J(2) of that Act modifies the definition of foreign person in the Foreign Acquisitions and Takeovers Act for Australian citizens: they are taken to be ordinarily resident in Australia whether or not they were "ordinarily resident" as explained at [9] above. 2. Effectively, Australian citizens are exempted from liability for surcharge land tax. In Mr Barsoum's early correspondence with the Chief Commissioner concerning his assessment, he claimed exemption by reason of his Australian citizenship. However, it emerged that he was not in fact an Australian citizen during the 2017 tax year and had not become a citizen until 10 May 2019. At the hearing of the substantive proceedings, he conceded that that was so. The substantive decision 1. Mr Barsoum claimed that he was not a foreign person and was not liable for the surcharge land tax for the 2017 land tax year, as assessed. Those contentions were based on the "200 days Test", which we have described at [9] above. To be treated as being "ordinarily resident" in Australia and therefore not liable to 2017 surcharge land tax, Mr Barsoum had to demonstrate that he had "actually been in Australia" during 200 or more days during calendar 2016. 2. In summary, Mr Barsoum claimed that the Chief Commissioner was mistaken as to the number of days which he had been absent from Australia during calendar 2016. If he was not mistaken, then being physically present in Australia for 173 days, rather than 200 days is "substantial compliance" with the 200-day test. The Tribunal concluded that there was no basis for that submission. 3. Mr Barsoum made what were described as "voluminous" submissions in relation to the number of days he had actually been in Australia during 2016. He contended that the relevant legislation did not require physical presence in Australia. However, the Tribunal concluded at [42]-[44] of the substantive decision, that: 1. contrary to Mr Barsoum's contention in this regard, the expression "actually been in Australia" meant, in its statutory context, physically present in Australia: see Gao v Chief Commissioner of State Revenue [2020] NSWCATAD 216 at [58]-[59] ("Gao"); 2. it could not be satisfied on the balance of probabilities that Mr Barsoum had actually been in Australia during 200 or more days during calendar 2016; and 3. accordingly Mr Barsoum had not satisfied the requirements of s 5 (1) of the Foreign Acquisitions and Takeovers Act and was not a person who was ordinarily resident in Australia for the purpose of section 4 of that Act with respect to the 2017 land tax year: see the substantive reasons at [65]- [66]. 1. As to the interpretation of the relevant statutory provisions, Mr Barsoum submitted to the Tribunal in the substantive proceedings that the Chief Commissioner has a discretion to waive liability for surcharge land tax if there were exceptional circumstances. The exceptional circumstances Mr Barsoum put forward were: exceptional work related circumstances; financial hardship, the corona virus economic crisis and unforeseen circumstances. The Tribunal decided that no such discretion was available to the Chief Commissioner and that the "undefined discretion relied on by Mr Barsoum in reliance on the case of O'Sullivan v Farrer(1989) 168 CLR 210 was not applicable. The costs decision 1. In separate proceedings, the Tribunal ordered that Mr Barsoum pay the Chief Commissioner's costs of and incidental to the substantive proceedings, as agreed or assessed on the ordinary basis. 2. The costs decision was made "on the papers", that is, without a hearing: Civil and Administrative Tribunal Act 2013 (NSW) ("NCAT Act"), s 50. The Tribunal made several findings, the most significant of which are summarised below: 1. Mr Barsoum had the onus of proving that the Chief Commissioner's decision was not correct but he provided no probative evidence in the substantive proceedings that he had actually been in Australia during 200 or more days during calendar 2016. Mr Barsoum's application was so obviously lacking in merit that any reasonable person in his position would have recognised that it was bound to fail. It follows that Mr Barsoum's application for administrative review was "frivolous, vexatious, misconceived or lacking substance". 2. The Chief Commissioner informed Mr Barsoum on several occasions from 17 June 2016 to part-way through the hearing on 12 August 2020, that if he was successful in the substantive proceedings, he would seek an order that Mr Barsoum pay the Chief Commissioner's costs of those proceedings and that if Mr Barsoum withdrew his application to the Tribunal he would not seek costs. 3. Mr Barsoum was aware that by proceeding with his application, he risked a costs order. During the hearing when the Chief Commissioner had already incurred the vast majority of his costs, he gave Mr Barsoum the opportunity to walk away from the dispute free of a costs order, but Mr Barsoum declined. The law as to costs in Tribunal proceedings 1. Orders for costs in Tribunal proceedings are dealt with in section 60 of the NCAT Act. For convenience, the text of that section is set out in full in the Appendix to these reasons. What may be regarded as the starting point is that each party to proceedings is to pay its own costs. That general rule is subject subsection (2), which allows the Tribunal to award costs, but only if it is satisfied that there are "special circumstances" warranting such an award. 2. "Special circumstances" are not exhaustively defined in the NCAT Act. When determining whether special circumstances exist, s 60 (3) allows the Tribunal to have regard to the matters set out in paragraphs (a) to (f) of that subsection and, under paragraph (g), to "any other matter that the Tribunal considers relevant". The matters to which the Tribunal may have regard include the relative strengths of the claims made by each of the parties, including whether a party has made a claim which has no tenable basis in fact or law (paragraph (c)) and whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance (paragraph (e)). 3. Subsection 60(4) provides that if the Tribunal does award costs, it may determine by whom and to what extent they are to be paid and may order that the cost be assessed in accordance with legal costs legislation pursuant to the Legal Profession Uniform Law Application Act 2004 or that they may be assessed on any other basis. 4. The case of Cripps & Anor v G & M Dawson Pty Ltd & Anor [2006] NSWCA 81 ("Cripps") involved an application for costs before the Administrative Decisions Tribunal (one of the predecessor bodies to NCAT) and its Appeal Panel. The costs provisions at that time were relevantly identical to s 60 of the NCAT Act. The Court of Appeal made the following observation about the meaning of "special circumstances" at [60]: ".. It suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional". 1. In Fitzpatrick Investments Pty Limited v Chief Commissioner of State Revenue [2015] NSWCATAD 103, the Tribunal referred to Cripps and noted that the expression "special circumstances" is also found in other legislation and a similar interpretation has been suggested. 2. In Groth v Secretary, Department of Social Security [1995] FCA 1708, Keifel J (as her Honour then was) agreed that the phrase "special circumstances", although imprecise, is sufficiently understood so as not to require judicial gloss and that for the purposes of the appeal before her Honour, the only enquiry to be undertaken was whether there were special circumstances to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case. The nature and scope of internal appeals 1. An appeal to the Appeal Panel does not provide a losing party in the Tribunal below with the opportunity simply to run their case again: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]. To succeed in an appeal, the appellant must demonstrate either an error on a question of law or that permission (that is, "leave") to appeal should be granted to appeal on grounds other than a question of law: NCAT Act, s 80(2). Questions of law 1. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 ("Prendergast") the Appeal Panel set out at [13] the following non-exhaustive list of questions of law: 1. whether there has been a failure to provide proper reasons; 2. whether the Tribunal identified the wrong issue or asked the wrong question; 3. whether a wrong principle of law had been applied; 4. whether there was a failure to afford procedural fairness; 5. whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. whether the Tribunal took into account an irrelevant consideration; 7. whether there was no evidence to support a finding of fact; and 8. whether the decision is so unreasonable that no reasonable decision-maker would make it. Application for leave to appeal 1. The principles governing an application for leave to appeal under the NCAT Act are well-established and are repeated in many decisions of the Appeal Panel, often quoting Collins v Urban [2014] NSWCATAP 17("Collins v Urban"). They are similar to the principles applied by the courts when determining whether to grant leave to appeal from an interlocutory decision. In Secretary, Department of Family and Community Services v Smith [2017] NSWCA 206, the Court of Appeal said at [28] (citations omitted): "Only if the decision is attended with sufficient doubt to warrant its reconsideration on appeal will leave be granted. Ordinarily, it is only appropriate to grant leave where there is an issue of principle, a question of general public importance, or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable. It is well established that it is not sufficient merely to show that the trial judge was arguably wrong." 1. It is clear, from Collins v Urban, BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [20] and Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45], that in order to be granted leave to appeal the applicant must demonstrate something more than that the decision was arguably wrong or that there is some bona fide challenge available to an issue of fact. In Collins v Urban, the Appeal Panel confirmed at [84] that ordinarily, it is appropriate to grant leave only in matters that involve: 1. issues of principle; 2. questions of public importance or matters of administration or policy which might have general application; 3. an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; 4. a factual error that was unreasonably arrived at and clearly mistaken; or 5. the Tribunal having gone about the fact-finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed. Grounds of appeal Grounds of appeal relating to substantive decision 1. Mr Barsoum's grounds of appeal were not confined to the Tribunal's costs decision. Five of his grounds of appeal purported to appeal from factual findings and legal rulings made by the Tribunal in the substantive proceedings. Mr Barsoum did not appeal from that decision so he cannot agitate those grounds in these proceedings. We summarise those grounds of appeal below. The first two grounds relate to factual findings and the other three grounds relate to legal rulings: 1. failing to give any or adequate weight to the need for Mr Barsoum to be present in Fiji and to take into account what he asserted to be a conflict of laws arising from that need; 2. failing to take into account the evidence being an image of Mr Barsoum's boarding pass and "practices at Australian airports"; 3. failing to recognise that the Chief Commissioner had an implied discretion as to whether or not to impose a surcharge land tax; 4. construing the phrase "actually been in Australia " for the purposes of s5 (1)(a) of the Foreign Acquisitions and Takeovers Act, based on the decision in Gao v Chief Commissioner of State Revenue [2020] NSWCATAD 216; and 5. failing to give adequate weight to Mr Barsoum's "substantial compliance" with the 200 days Test. Grounds of appeal on questions of law relating to the costs decision 1. We have identified twelve other grounds of appeal. Those grounds are capable of being characterised as raising questions of law and we have dealt with them on that basis. The Tribunal erred in deciding to determine the costs proceedings "on the papers" 1. Under s 50(2) of the NCAT Act, "the Tribunal may make an order dispensing with a hearing if it is satisfied that the issues for determination can be adequately determined in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Tribunal." Before making an order dispensing with a hearing, the Tribunal must give the parties an opportunity to make submissions about the proposed order and take those submissions into account: NCAT Act, s 50(3). The Tribunal is not required to conduct a hearing in person just because a party objects to an order dispensing with a hearing. 2. The Tribunal gave Mr Barsoum the opportunity to make submissions as to whether the costs application should be determined without a hearing. The directions set out a timetable for making any such submissions. Mr Barsoum responded generally to the Chief Commissioner's submissions as to costs by way of his own written submissions, but did not address the issue of whether costs should be decided "on the papers". 3. In the appeal hearing, when we sought Mr Barsoum's confirmation or otherwise that he was relying on this ground, he replied in the affirmative and said that it was based on "a denial of natural justice". 4. As required by s 50(3) of the NCAT Act, the Tribunal gave Mr Barsoum an opportunity to make submissions about the proposed order. He did not avail himself of that opportunity. The Tribunal followed the procedural requirements of the legislation. Mr Barsoum was not denied natural justice. The Tribunal erred in awarding costs on an indemnity basis 1. We understand that after the costs decision had been handed down, the Chief Commissioner wrote to Mr Barsoum requesting that he pay a certain amount in costs. Because Mr Barsoum considered this amount to be very high, he characterised the costs order as being on an indemnity basis. That is not correct. The Tribunal ordered that costs be paid on the ordinary party/party basis, not on an indemnity basis. The order was in the following terms: "Mr Barsoum pay the costs of the Chief Commissioner, of and incidental to the substantive proceedings, as agreed or assessed on the ordinary basis." (Emphasis added) 1. As the assumption on which this ground of appeal was based is incorrect, it must fail. The Tribunal applied an incorrect onus and standard of proof 1. The onus and standard of proof relate to the facts that are required to be established. In an application for costs, the onus of establishing any disputed facts is on the applicant for costs. The requisite standard of proof in relation to disputed facts in civil cases is the "balance of probabilities": Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25 at [31] and B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187, (2008) 74 NSWLR 481 at [104]. 2. Mr Barsoum contended firstly that in the costs decision the Tribunal erred in placing the onus of proof on him, rather than on the Chief Commissioner. At [28], the Tribunal correctly identified that the onus is on the applicant for costs, in this case the Chief Commissioner: The applicant for costs bears the onus of establishing an entitlement to costs in a jurisdiction where the primary rule is that each party bears their own costs: Kurmond Homes Pty Ltd v Spiteri [2015] NSWCATAP 48 at paragraph [18]. 1. The Tribunal was satisfied that the Chief Commissioner had discharged that onus in relation to disputed facts. This aspect of the ground of appeal is not made out. 2. The second contention under this ground of appeal was that the Tribunal had erred in imposing an incorrect and excessive standard of proof on him, namely the balance of probabilities. The balance of probabilities is the correct standard. It is not an incorrect or excessive standard. The Tribunal erred in failing to recognise that the making of a costs order was dependent upon the substantive proceedings being of a complex nature 1. In making this contention, Mr Barsoum apparently relied upon observations of the Appeal Panel in The Owners, Strata Plan No 55773 v Roden (Costs) [2020] NSWCATAP 197 at [46]. Referring to a first instances costs decision, the Appeal Panel held that: 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. 1. We understood this paragraph to reflect the two-stage process referred to by the Appeal Panel of the Tribunal in Obieta v Australian College of Professionals Pty Ltd [2014] NSWCATAP 38. A finding that one or more of the "special circumstance" factors set out in s 60 (3) have been made out does not necessarily mean that there are special circumstances warranting an award of costs. It remains necessary for the Tribunal to consider whether those circumstances are sufficient to amount to "special circumstances" that justify a departure from the ordinary rule that each party bear its own costs. 2. On our reading of this paragraph in context, the Appeal Panel was not intending to state that the making of a costs order was dependent upon the substantive proceedings being of a complex nature. Rather, pursuant to s 60(3)(d) of the NCAT Act, "the nature and complexity of the proceedings" was a factor to which the Tribunal at first instance had regard in deciding whether there were special circumstances warranting an award of costs. Having made that finding, the Tribunal went on to determine that "special circumstances" exist. It appears that Mr Barsoum has misunderstood what the Appeal Panel was saying in The Owners, Strata Plan No 55773 v Roden (Costs) [2020] NSWCATAP 197 at [46]. This ground of appeal was misconceived. The Tribunal failed "to exercise its discretion in a judicial manner" 1. When deciding whether to make a costs order under s 60 of the NCAT Act, the Tribunal is exercising a discretion and must do so judicially. The High Court case of Oshlack v Richmond River City Council (1998) 193 CLR 72 (at 81 and 97) is authority for the proposition that where a court or tribunal has a discretion to award costs, that discretion must be exercised judicially and not capriciously and that the fundamental rationale for the awarding of costs is that such an award is compensatory and not punitive. 2. In his written submissions, Mr Barsoum asserted that the Tribunal had failed to exercise its discretion fairly, but rather had done so in a manner which was "harsh and unconscionable" and "capricious". Mr Barsoum provided no basis for that assertion. The Tribunal concluded that Mr Barsoum's application was so obviously lacking in merit that any reasonable person in his position would have recognised that it was bound to fail. Having come to that view, it was not "harsh and unconscionable" or "capricious" to exercise the discretion to make a costs order. The Tribunal erred in finding that Mr Barsoum's conduct of the proceedings was "out of the ordinary" 1. At [60] of the costs decision, the Tribunal characterised the way Mr Barsoum conducted his case as being "out of the ordinary". As we noted above, the term "out of the ordinary" comes from the Court of Appeal's decision in Cripps & Anor v G & M Dawson Pty Ltd & Anor [2006] NSWCA 81 at [10]. To constitute "special circumstances" those circumstances do not have to be extraordinary or exceptional. The Tribunal regarded it as at least "out of the ordinary" for Mr Barsoum to apply for a review of the Chief Commissioner's decision when his application lacked merit. There was no error in that conclusion. The Tribunal erred in finding that the substantive proceedings were misconceived and lacking in substance, within the meaning of s 60 (3) (e) of the NCAT Act 1. This ground was introduced by Mr Barsoum in his oral submissions. In the reasons for the costs decision at [36] to [42] the Tribunal provided detailed reasons for rejecting Mr Barsoum's submissions that his case was not misconceived or lacking in substance. The Tribunal said, in part: "[41] I rejected Mr Barsoum's submissions for several reasons. Overall, they provided no legal or factual basis to satisfy his onus; the number of days his business records dated he was in Australia during the relevant period did not add up accurately; some substantial submissions such as those relating to indemnity costs.. were irrelevant to the proceedings as indemnity costs were neither applied for nor awarded; Mr Barsoum submitted at [18] that the Tribunal had not taken into consideration "established practices at Australian airports" without providing either adequate probative evidence as to such practices or any supporting authority; Mr Barsoum's claim that [22(a)] that there was no evidence that his proceedings were frivolous, vexatious, misconceived or lacking substance, disregards numerous specific findings in the (reasons for the substantive decision) to the effect that he bore the onus of supporting his submissions with probative evidence and had not provided either probative evidence or relevant authorities." 1. In the substantive decision, the Tribunal decided that Mr Barsoum's application was lacking in merit, both factually and legally. As we have said, Mr Barsoum sought to re-agitate several of these findings and conclusions when appealing from the costs decision. As he did not appeal from the substantive decision, he could not on appeal contend that the Tribunal made an error in those reasons for decision. Based on the findings and conclusions in the substantive proceedings, the Tribunal's conclusion that Mr Barsoum's application was misconceived and lacking in substance was open to it. The Tribunal erred in taking into account the Chief Commissioner's statements to Mr Barsoum, which were alleged to have alerted him to the possibility of an application for costs 1. By submitting that the Tribunal took into account certain matters that it was bound not to take into account, Mr Barsoum may have intended to rely on one of the so-called "relevancy grounds" of appeal. When determining whether to make a costs order under s 60 of the NCAT Act, a decision maker must take into account mandatory considerations, that is considerations that he or she is " bound to take into account in making that decision": Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39. Conversely, a decision maker must not take into account forbidden considerations. If the decision maker does either of those things, the decision will be invalid. 2. As we understood it, Mr Barsoum's contention was that the Tribunal erred in taking into account certain statements made to him by the legal representative of the Chief Commissioner in the course of negotiation or discussion during the substantive proceedings. We understood Mr Barsoum to assert that these constituted warnings that the Chief Commissioner would seek costs against him should he proceed with the substantive proceedings. We did not understand the Chief Commissioner to dispute that such discussions occurred or that they were taken into account, but to dispute that they constituted any sort of "warning" in the nature of a threat. 3. In our view, the Tribunal was not in error in taking the discussions into account. Under s 60 (3)(g) of the NCAT Act, the Tribunal may determine that there are "special circumstances" by having regard to "any other matter that the Tribunal considers relevant". The fact that Mr Barsoum was on notice of the Commissioner's view that his application lacked substance, was a relevant consideration when exercising the costs discretion. It was one of several matters that the Tribunal took into account. There is no statutory or other basis for characterising it as a forbidden consideration. The Tribunal erred by taking into account that he has been admitted as a lawyer for 10 years 1. This ground raises another "relevancy ground" although it was not expressed in that way. Mr Barsoum submitted that the Tribunal treated him as a trained lawyer, rather than as a private person. At [60], the Tribunal referred to the fact that Mr Barsoum is a lawyer of more than 10 years' standing: In summary, I find that Mr Barsoum, who was admitted as a lawyer more than 10 years before the substantive proceedings, conducted his case in those proceedings in a manner which may well be characterized as "out of the ordinary". His case was misconceived and lacking in substance, whether or not it was extraordinary or exceptional. 1. We agree with Mr Barsoum that his status as a lawyer is not particularly relevant when considering whether his application is misconceived or lacks substance. But, to constitute an error of law, that consideration must be a consideration that the Tribunal was forbidden from taking into account. We did not consider Mr Barsoum's status as a lawyer to be so extraneous as to fall within the "forbidden" category. The Tribunal erred by failing to take into account hardship 1. Mr Barsoum in his written submissions contended that he is and was subject to hardship. At the hearing, he described the effect of the costs decision on his financial position and his health. He provided no supporting evidence. The hardship claim was not made in the costs proceedings. However, in any case, it is not relevant. The fundamental rationale for the awarding of costs is that such an award is compensatory and not punitive. The Tribunal failed to fulfil the objectives section 3 of the NCAT Act 1. As we understood it, Mr Barsoum's drew from section 3 of the NCAT Act, (which is headed "Objects of the Act"), a principle that proceedings in the Tribunal must be affordable. He said that he had relied on that section in proceeding with a belief that the Tribunal would not order costs, or at least not costs at (what he regarded as) an unaffordable level. 2. That is not a reasonable or valid construction of section 3. Neither the reference in paragraph (c) of the section to ensuring that the Tribunal is accessible and responsive to the needs nor its users, or that in paragraph (d) to the Tribunal resolving the real issues justly, quickly, cheaply and with as little formality as possible limits the power of the tribunal to order costs, as provided for in detail in section 60. 3. In fact, in the costs proceedings the Tribunal did not fail to fulfil any objectives in section 3 and it made costs orders in exercise of its powers and discretions in section 60. This ground must fail. The Tribunal erred by giving inadequate weight to the "imbalance of power" between the parties 1. We understood this contention to be based on the imbalance between the Chief Commissioner's position, power and resources and those of Mr Barsoum. That is not a relevant consideration which the Tribunal was bound to take into account when exercising the discretion to award costs. This ground of appeal is not made out. The Tribunal erred in taking into account the fact that Mr Barsoum had not appealed from the substantive decision, but only from the costs decision 1. At [42] of the costs decision, the Tribunal made the following comment: "Mr Barsoum's claim that he was not a 'foreign person' for the purpose of the relevant legislation is contrary to the clear findings in the (reasons for the substantive decision), from which the Barsoum did not appeal and there is no need to repeat those reasons in these costs proceedings." 1. As we understood it, Mr Barsoum asserted that the Tribunal took into account his decision not to appeal from the substantive decision as an indication that the costs application had merit. We could not see that the Tribunal did this. On any proper reading of the references to the failure to appeal from the substantive decision, it is clear that the Tribunal was merely emphasising that the reasons for the substantive decision had not been varied or diluted as a result of any appeal. The case "raises matters of public interest and general importance" 1. As noted by Counsel for the Chief Commissioner, this contention appeared to arise from observations of the Full Federal Court in Ruddock v Vadarlis (No 2) (2001) 115 FCR 229, at [17]- [19], where Black CJ and French J observed that some cases raised "a novel question of much general importance" and that in such cases the court might depart from its usual role of ordering that costs follow the event. But they added that this power must be exercised cautiously, given the nebulous nature of the concept of "public interest". 2. In the costs decision at [53] the Tribunal rejected Mr Barsoum's characterisation of his case as involving matters of public interest and general importance. In our view, the case merely involved the proper construction of the 200 days Test and the phrase "actually been in Australia". It was not unique or significant. In any case, the Full Federal Court's comments related to proceedings where costs follow the event. That is not the general rule under s 60 of the NCAT Act. Conclusion 1. We concluded that Mr Barsoum has failed to establish that the Tribunal had fallen into error on any question of law and there was nothing in what he put to us to justify a grant of leave to appeal. It followed that leave to appeal should be refused and the appeal should be dismissed and we ordered accordingly. Orders 1. Leave to appeal refused. 2. Appeal dismissed. ********** Appendix Civil and Administrative Tribunal Act 2013 (NSW) 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. (4) If costs are to be awarded by the Tribunal, the Tribunal may-- (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014 ) or on any other basis. (5) In this section--"costs" includes-- (a) the costs of, or incidental to, proceedings in the Tribunal, and (b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal. 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 Amendments 22 September 2021 - Pursuant to s 63 of the Civil and Administrative Tribunal Act: Paragraph 21 of the decision is amended to delete the words "by the Chief Commissioner of State Revenue" and to change the reference to paragraph [10] to paragraph [60]. 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: 22 September 2021