Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Cornish v Deputy Secretary, Department of Local Government Planning and Policy [2022] NSWCATAP 6 Hearing dates: 27 September 2021 Date of orders: 12 January 2022 Decision date: 12 January 2022 Jurisdiction: Appeal Panel Before: S Westgarth, Deputy President at [1] G Furness SC, Senior Member at [76] Decision: (1) Appeal upheld. (2) Time is extended for lodgment of the Appellant's application for costs in the proceedings below. (3) The Respondent is to pay the costs of the Appellant in the Tribunal proceedings 2017/00212948 as agreed or as assessed. (4) If a party seeks costs of this appeal, they must file and serve submissions with respect to costs within 14 days. (5) If a party receives from the other party a submission as to costs of the appeal, they must file their submissions in response within a further period of 14 days. (6) The submissions of the parties should address the question of whether costs of the appeal may be determined by the Appeal Panel "on the papers" by the Appeal Panel dispensing with a further hearing. Catchwords: APPEALS – whether special circumstances exist warranting an order for costs, proceedings and claim lacked a jurisdictional basis. Legislation Cited: Civil & Administrative Tribunal Act 2013 (NSW) Civil & Administrative Tribunal Rules 2014 (NSW) Local Government Act 1993 (NSW) Cases Cited: Alchin v Rail Corporation NSW [2012] NSWADT 142 Chief Executive, Office of Local Government v Cornish [2018] NSWCATOD 110 Clarke v Tapp [2015] NSWCATAP 81 Cornish v Secretary, Department of Planning, Industry and Environment [2019 ] NSWSC 1134 Council of the Law Society of New South Wales v DRE [2019] NSWCATOD 147 Council of the Law Society of New South Wales v EBX [2019] NSWCATOD 155 Council of the Law Society of New South Wales v Judah [2019] NSWCATOD 135 Deputy Secretary, Local Government Planning and Policy v Cornish [2021] NSWCATOD 35 EJE v Western Sydney Local Health District [2021] NSWCATAP 247 Hannaford v Commonwealth Bank of Australia [2014] NSWCA 297 House v King (1936) 55 CLR 500; [1936] HCA 40 Jackson v NSW Land & Housing Corporation [2014] NSWCATAP 22 Kelly v Szatow [2020] NSWSC 407 Latoudis v Casey (1990) 170 CLR 534 The Owners Corporation of Strata Plan 4521 v Zouk & Anor [2007] NSWCA 23 Wilson v Chan and Naylor Parramatta Pty Ltd (2020) 103 NSWLR 140; [2020] NSWCA 213 Category: Principal judgment Parties: Marcus Cornish (Appellant) Deputy Secretary, Department of Local Government Planning and Policy (Respondent) Representation: Counsel: PE King (Appellant) M Cobb-Clark (Respondent) Solicitors: Robert Balzola & Associates (Legal) Pty Ltd (Appellant) Office of Local Government (Respondent) File Number(s): 2021/00117934 Publication restriction: Nil Decision under appeal Court or tribunal: New South Wales Civil & Administrative Tribunal Jurisdiction: Occupational Division Citation: [2021] NSWCATOD 35 Date of Decision: 30 March 2021 Before: L Pearson, Principal Member File Number(s): 2017/00212948 REASONS FOR DECISION Introduction 1. S WESTGARTH: On 30 March 2021 the Tribunal made an order dismissing the Appellant's application for an order for costs in proceedings at first instance and the Appellant now appeals that dismissal. In its place he seeks an order that the Respondent (who was the Applicant at first instance) pay the Appellant's costs of the proceedings at first instance. We will refer to the decision under appeal as the Decision. It is reported as Deputy Secretary, Local Government Planning and Policy v Cornish [2021] NSWCATOD 35. 2. The proceedings had a lengthy and somewhat complex history prior to the order made on 30 March 2021 and it is necessary to set out in chronological order that history so as to understand the Decision and this decision. The history of the proceedings prior to decision of 30 March 2021 1. The Appellant has been a Councillor on Penrith City Council and an incident occurred at Council meetings in November and December 2014 which resulted in a complaint being made concerning the Appellant's conduct at Council meetings. Following the complaint, a review of the conduct of the Appellant occurred and the person conducting the investigation made recommendations to the Council that the Appellant be censured. Thereafter on 27 July 2015 Council passed a resolution (known as resolution CW11) formally censuring the Appellant for alleged breach of a code of conduct that Council had adopted. The motion required the Appellant to acknowledge the findings of breaches of the code of conduct, offer an apology and to give an undertaking concerning future conduct. The Appellant did not comply and the Council's general manager referred the matter to the Office of Local Government as involving a possible breach of the misconduct provisions of the Local Government Act 1993 (NSW). 2. The Acting Chief Executive of that Office found in May 2016 that there was sufficient evidence to conclude that the Appellant had breached clauses in the code of conduct. On 10 July 2017 the Acting Chief Executive lodged within NCAT an application for disciplinary findings and orders alleging a breach of clause 8.10 the code of conduct. Clause 8.10 stated in effect that a councillor must comply with any Council resolution requiring a councillor to take action as a result of a breach of the code. The action required was to acknowledge the findings, apologise, and give undertakings not to comment and to undertake a course of training. 3. The application to NCAT was heard in the first half of 2018 and the decision was published on 12 July 2018 (Chief Executive, Office of Local Government v Cornish [2018] NSWCATOD 110). Both the Chief Executive (the Applicant) and the Appellant (the Respondent in those proceedings) were represented by counsel and solicitors. 4. It is of relevance to this decision to record some aspects of the Tribunal's decision of 12 July 2018. The Chief Executive sought an order that the Appellant be suspended from civil office or, in the alternative, that his right to payment be suspended or, in the further alternative, that he be reprimanded. The Tribunal identified three principal issues for determination. The first was whether the Tribunal had jurisdiction to determine the application. Second was whether the failure of the Appellant to comply with Council resolution CW11 constituted misconduct and a breach of clause 8.10. The third was whether disciplinary action was appropriate. The Chief Executive filed an Amended Application alleging breach by the Applicant of clause 8.10 and the particulars of breach included the failure by the Appellant to comply with the terms of a Council resolution CW11. The Tribunal recorded that the Appellant submitted that the Tribunal lacked jurisdiction to hear the application on the bases identified in [24] and "on a number of other bases". At [111] the Tribunal found that the Appellant had engaged in misconduct that was in breach of clause 8.10. 5. The Tribunal went on to consider whether it should conduct a merits review of the findings and recommendations of the person that conducted the investigation. At [124] the Tribunal determined that it was not the role of the Tribunal to conduct a type of merits review of the findings of the "conduct reviewer". Rather, the Tribunal needs only to be satisfied that there was a sufficiency of evidence before the conduct reviewer to make findings of misconduct [125]. 6. The Tribunal determined that it was appropriate to impose disciplinary orders and at [141] determined that the appropriate order was that the Appellant's right to payment be suspended for a period of three months. Costs were reserved but a direction was made at [143] that if either party seeks costs they should file and serve written submissions within two weeks, with a further provision for either party to respond to the other party's submissions within the further period of two weeks. 7. The Appellant lodged an appeal with the Tribunal against the orders made on 12 July 2018. On 9 October 2018 the Appeal Panel published its decision which was to the effect that the decision of 12 July 2018 was not an internally reviewable decision (a term defined in the Civil & Administrative Tribunal Act 2013 (NSW) (the NCAT Act)) and that the provisions of the NCAT Act required an appeal from a decision of this kind (namely a decision based upon provisions of the Local Government Act) to be made to the Supreme Court. Accordingly, the appeal was dismissed. 8. The Appellant appealed to the Supreme Court and the appeal was heard before Basten JA on 22 August 2019. His Honour's judgment was published on 3 September 2019 (Cornish v Secretary, Department of Planning, Industry and Environment [2019] NSWSC 1134). 9. At [17] his Honour stated that the primary proposition relied upon by the Appellant was that the scheme of the Local Government Act did not permit the code of conduct and the related procedures to impose disciplinary penalties for the breach of their own provisions. If that proposition were made good, NCAT had no power to discipline the Appellant for breach of sanctions invalidly imposed by the adoption of Council resolution CW11. Secondly, his Honour stated that if the resolution was valid (contrary to the first proposition) NCAT had erroneously limited its jurisdiction to a consideration of those facts and declined to consider whether the sanctions imposed by the Council were appropriate having regard to the conduct which occurred at the two Council meetings. If the Appellant were successful on this ground but not on the first ground, then the matter would need to be remitted to NCAT for a rehearing. 10. At [57] his Honour found that resolution CW11 lacked authority to require the Appellant to take the actions it purported to mandate. Motion CW11 included censure (a step available to Council), but which was not the basis of the proceedings before NCAT. However, the disciplinary aspects of motion CW11 were beyond power. His Honour found that the scheme of the legislation required disciplinary actions to be undertaken through the Chief Executive or NCAT. At [58] his Honour stated that the failure of the Appellant to take the steps required by resolution CW11 could not constitute a breach of the code of conduct and could not therefore form the basis of a disciplinary order in the terms made by the Tribunal. 11. The judgment records the fact that the Respondent (now the Secretary, Department of Planning, Industry and Environment after the office of the Chief Executive was abolished) submitted that the proceedings were an inappropriate vehicle for review of the validity of resolution CW11 because the Council was not a party to the proceedings. 12. His Honour determined that the proceedings could be determined in the absence of the Council for a number of reasons. The first was that the question for determination is not so much one concerning the validity of the Council's resolution but rather whether the Acting Chief Executive of the Office of Local Government correctly identified the form of misconduct relied upon before the Tribunal. The Council had no power to take the forms of disciplinary action which were available in the Tribunal. It could only refer the matter to the Chief Executive. It was the validity of the Chief Executive's referral to NCAT, as a basis for NCAT's jurisdiction, which was directly in issue [62]. Secondly, at [63], his Honour said "if it mattered, the issue was raised before the Tribunal, albeit in a somewhat convoluted form" and his Honour referred to written submissions filed on behalf of the Appellant (Mr Cornish) on 13 February 2018. Thirdly, the absence of jurisdiction in the Tribunal is not a matter which can be disregarded. 13. The balance of the judgment concerns whether NCAT, following referral to it by the Chief Executive, has a limited role (as found by the Tribunal) or a broader role and held that the Tribunal ought to have conducted an enquiry as to the justification for the recommendations made by the investigator [90]. 14. It followed from the reasoning of his Honour that the application before NCAT should have been dismissed. His Honour made the following orders: 1. Set aside the order of NCAT made on 12 July 2018. 2. In lieu thereof order that the proceedings commenced in the Tribunal be dismissed. 3. The Secretary pay the Appellant's costs in the court. 1. On 15 September 2020 the Appellant made application to the Tribunal for an order that his costs incurred in the Tribunal proceedings be paid by the Respondent. That application was made approximately one year after publication of the Supreme Court judgment. 2. The application for an order for costs was heard in the Tribunal in February 2021 and the decision published on 30 March 2021. As indicated before, the application was dismissed. The Tribunal's reasoning is summarised in the following paragraphs. The Decision under appeal 1. It was common ground between the parties that the Tribunal has power under s 60 of the NCAT Act to make an order for costs and the Tribunal proceeded upon the basis of the existence of such a power. 2. Section 60 is in the following terms: 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. 1. The Decision records that the Appellant submitted that there are special circumstances warranting an award of costs based upon s 60(3)(c), (d), (e) and (g). The Appellant submitted that the effect of the Supreme Court order was that the Tribunal's decision was void and, as a consequence, the application for costs was not made out of time. The Appellant further submitted that there was no delay in making the application for costs. The period 12 July 2018 to 3 September 2019 was consumed by the proceedings in the Supreme Court. From 4 September 2019 to 30 June 2020 the Appellant was consumed by an application to Penrith City Council for the purposes of exhausting administrative remedies before attempting an application for costs in the Tribunal. The period from 4 June 2020 was taken up seeking legal advice. 2. The Decision records the Chief Executive's submissions. The Chief Executive relied upon the decision of Harrison AsJ in Kelly v Szatow [2020] NSWSC 407 in support of the contention that the order set aside by Basten JA was the "singular order made by the Tribunal that Councillor Cornish's right to payment be suspended". The Chief Executive submitted that Basten JA had made no order as to the costs of the proceedings before the Tribunal and that the directions as to costs made by the Tribunal in the decision of 12 July 2018 continue to have effect. Neither party filed submissions on the question of costs within the two-week period required by those directions. The Decision records that the Appellant approached the Council for costs to be paid and that there was no explanation as to why that approach had occurred having regard to the fact that the Council was not involved in the Tribunal proceedings. The Chief Executive submitted that the lengthy delay has caused prejudice. Firstly, there is the prejudice of the delayed finality of these proceedings, and secondly, there will be a further period involving a costs assessment process. The Chief Executive disputed that special circumstances exist warranting an award of costs. 3. The Tribunal accepted that it had power to award costs notwithstanding the fact that the application had been dismissed because the Tribunal lacked jurisdiction. Both parties contended for that position, the Chief Executive relying upon comments made by Harrison AsJ in Kelly v Szatow and the Appellant relying upon the decision of the Court of Appeal in Wilson v Chan and Naylor Parramatta Pty Ltd (2020) 103 NSWLR 140; [2020] NSWCA 213. In this appeal neither party contended that the Tribunal lacked power to award costs as a consequence of the dismissal of the Tribunal's proceedings on the basis of a lack of jurisdiction. 4. The Tribunal considered the question of whether the Appellant had made application for an order for costs out of time and therefore required an extension of time. At [55] of the Decision, the Tribunal expressed the view that in the absence of a formal order dismissing the directions made by the Tribunal on 12 July 2018 those directions for the making of costs application were not affected by the orders of the Supreme Court. The Tribunal found that the Appellant's costs application was made outside the time specified in the directions and that an extension of time is required. 5. The Tribunal referred to the principles to be considered when considering whether an extension of time should be granted. At [58] those principles are set out in some detail. Essentially, they may be summarised as follows: 1. The just resolution of proceedings remains the paramount consideration. 2. What is a just resolution needs to be understood in the context of the purposes and objectives of the power granted to the Tribunal to resolve disputes. 3. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to the just resolution of proceedings. 4. A party should be afforded a reasonable opportunity to present its case. 1. At [60] of the Decision, the Tribunal made the assumption in favour of the Appellant (which was stated to be accepted by the Chief Executive) that the relevant date for the commencement of an application for costs is the date that the Supreme Court set aside the Tribunal's orders, namely 3 September 2019. Therefore, the length of time from that date and the filing of the costs application was approximately 12 months. The Decision noted that that is significantly longer than any of the periods applicable in Tribunal proceedings generally as specified in the Civil & Administrative Tribunal Rules 2014 (NSW) (the NCAT Rules). At [61] the Tribunal noted that the reasons for the delay (summarised earlier in the Decision) relate primarily to the Appellant's application to the Council for reimbursement of legal costs. The Tribunal noted that no evidence had been provided to confirm the process of seeking reimbursement from the Council or what had occurred between 4 June to 15 September 2020. The Tribunal found that even if the time taken in negotiations with the Council can be disregarded, in the absence of any explanation as to why it took a further three months to lodge the application, the Tribunal "is not persuaded that there is an adequate explanation of the reasons for the delay in making the application" [61]. 2. At [62] the Tribunal stated that it agreed with the Chief Executive that it is relevant that the Chief Executive is prejudiced by being deprived of the ability to draw a line under the proceedings and incur additional time and money in a further assessment of costs (this being a reference to the fact that there was already an assessment of costs process underway with respect to the Supreme Court proceedings). At [63] the Tribunal found that the delay was significant, and not adequately explained, and that having regard to the importance of finality the Tribunal is not satisfied that the interests of justice would require that an extension of time to make a costs application should be granted[63]. 3. From [64] the Tribunal considered whether there are special circumstances warranting an award of costs (assuming an extension of time were granted). The Tribunal referred to the cases which describe special circumstances as circumstances that are out of the ordinary but that they need not be those which are exceptional or extraordinary. 4. In considering this question the Tribunal referred to the judgment of his Honour Basten JA and also to the transcript which refers to his Honour stating to counsel for the Appellant: "…your primary point as I read your submissions is that there was no power in the Council to impose mandatory orders of that kind requiring steps to be taken by him, and that it's disciplinary powers are limited to censure?" 1. Counsel agreed. Counsel then said that the Appellant had put that argument to the learned member (which we take to mean to the Tribunal) and his Honour said that he was not sure if the Appellant put it in those terms (meaning the terms articulated by his Honour). Counsel replied "not as clearly and succinctly as your Honour". 2. The Decision records at [72] that the Appellant conceded in oral submissions before the Tribunal at the costs hearing on 15 February 2021 that the jurisdictional issue on which Basten JA had based his decision was "not front and centre before the Tribunal". The Tribunal found that that "concession was appropriately made". At [73] the Tribunal found that the issues raised by the Appellant before the Tribunal in the primary proceedings as recorded in the decision of 12 July 2018 do not indicate that any of the grounds "squarely raised the issue of whether non-compliance with resolution CW11 could found the application before the Tribunal". 3. At [74] the Tribunal found that the reasoning contained in the Supreme Court judgment could enable one to conclude that the proceedings initiated by the Chief Executive in the Tribunal were misconceived or lacking in substance, (being the language of s 60(3)(e)). Significantly, the Tribunal then went on to conclude that "where there was no assumption that costs follow the event, the Tribunal does not regard the fact that the losing party was ultimately successful where there was ultimately found to be no basis on which the Tribunal could impose a disciplinary sanction on that party would, of itself, constitute a special circumstance". 4. At [75] the Tribunal considered the effect of s 60(3)(c) and concluded that it was not possible to discern from the tribunal's reasons (ie the reasons published on 12 July 2018) that there was anything about the relative strengths of either party's case that would constitute special circumstances. 5. At [76] the Tribunal considered the effect of s 60(3)(d) and found that the proceedings were "undoubtedly complex". The Tribunal found that that was a result of both the complexity of the legislation and the way in which the various bases on which jurisdiction was contested were put to the Tribunal. In addition, the Tribunal found that the jurisdictional point on which the Appellant was ultimately successful before Basten JA was not of itself complex but was not squarely put to the Tribunal except in a rather convoluted form (quoting the language of Basten JA). 6. At [77] the Tribunal characterised the Appellant's contention that there are special circumstances was based upon the proposition that he was ultimately successful in the Supreme Court. Further, the Tribunal found that there was no basis on which it could be concluded that there was anything inappropriate in the initiation or conduct of the Tribunal proceedings by the Chief Executive which might be relevant under s 60(3)(a) or (b). 7. The Tribunal concluded that having regard to the way in which the jurisdictional issue was identified and argued, the Tribunal does not agree that the ultimate outcome being in the Appellant's favour is a special circumstance warranting an order for costs. Notice of Appeal 1. A Notice of Appeal in respect of the Decision was filed on 27 April 2021. The grounds of appeal assert that the Tribunal made errors of law and of fact. The precise grounds are better understood by reference to the submissions. The Respondent has filed a Reply to Appeal. 2. Both parties filed written submissions and made oral submissions at the hearing. The following paragraphs summarise those submissions. Appellant's Submissions 1. The Appellant contends that an extension of time for lodgment of the Application for costs (made on 15 September 2020) is not required. It is submitted that the Tribunal was in error in deciding that the only order set aside by the Supreme Court was the order suspending the Appellant's right to payment [49], and that the correct position was that the directions made in respect of costs submissions were also set aside by the court. Accordingly, time was not running so as to impose a time limit for the filing of the application. 2. The Appellant also submits that the Tribunal erred in its determination that there were no special circumstances warranting an award of costs. In oral submissions Counsel elaborated upon this point by submitting that the Tribunal erred in failing to consider the reason behind the Supreme Court's dismissal of the application before the Tribunal. That reason was that the Tribunal had no jurisdiction to make an order of the kind sought by the Chief Executive. Counsel contended that the Tribunal erred at [77] in finding that there was nothing inappropriate in the initiation or conduct of the Tribunal proceedings by the Chief Executive. Counsel further contended that the Chief Executive failed to give sufficient focus to his or her function and was not a mere cipher of the wishes of the Council. The question of jurisdiction had been raised with the tribunal in the proceedings initiated by the Chief Executive. This is evident from the decision of 12 July 2018: see paragraph 6. The proceedings were void from the outset and time for the lodgment of a costs application did not commence to run. I interpose here to observe that it is apparent from the judgment of Basten J that the Appellant did raise the issue of whether the Tribunal had jurisdiction, albeit in a convoluted form. The Decision records that in the Tribunal proceedings under appeal in which the Appellant sought costs the Appellant conceded that the jurisdictional issue upon which Basten JA based his decision was "not front and centre" before the tribunal and that concession was appropriately made [72]. 3. Following the Supreme Court judgment published in September 2019 the Appellant took steps to seek recovery of his costs from the Council (see [27] of the Decision). The Appellant submits that this was a "valid path" as Council has its own "recovery policies". 4. Counsel further contended that if an extension of time were necessary, it was necessary to take into account that the position as to whether the Tribunal had authority to award costs in circumstances where the Tribunal lacked jurisdiction to determine the primary dispute was not clear until 8 September 2020, being the date of the publication of the Court of Appeal decision in Wilson v Chan and Naylor. 5. In respect of the inadequate explanation as to the activities of the Appellant in the period July to September 2020, the Appellant sought to tender and rely upon an affidavit of the Appellant dated 24 July 2021. The tender of that affidavit was objected to by Counsel for the Respondent on the basis that it constitutes fresh evidence that was reasonably available to be relied upon at the hearing at first instance (ie. at the hearing which occurred on 15 February 2021). We agreed with the submissions of Counsel for the Respondent, and rejected the tender of that affidavit. 6. The balance of the Appellant's submissions argue that special circumstances exist in respect of the proceedings warranting an award of costs. Respondent's Submissions 1. The Respondent's submissions may be summarised as follows: 1. An extension of time for the lodgment of the application is required. The Respondent agreed that time commences to run from 3 September 2020 (and not earlier). On that date order 2 was made by the Supreme Court. That order dismissed the proceedings commenced by the predecessor to the Respondent. Time to apply for a costs order commenced to run from then. 2. The second issue is whether time should be extended. The Respondent contended that there was no evidence before the Tribunal as to what steps the Appellant had taken between 3 September 2019 and 17 September 2020. The Respondent contended that the power to extend time is discretionary. Accordingly, the Appellant must establish a House v The King-type error in order to succeed on this issue. That is understood to be reference to the High Court judgment in House v King (1936) 55 CLR 500; [1936] HCA 40. The Tribunal's decision to refuse an extension of time is correct and should be upheld. 3. With respect to the issue of whether there were special circumstances warranting an award of costs, the Respondent contended that the submission that there were special circumstances invites a retrospective analysis of the Respondent's decision to commence proceedings in the Tribunal in 2017. Based upon a full knowledge of the state of the law and the Supreme Court's conclusion in the judicial review proceedings in 2019 such an approach is inappropriate. The Respondent was well within its rights, based upon its understanding of the law as at 2017, to commence proceedings against the Appellant. The Supreme Court judgment contains nothing critical of the Respondent in relation to its decision to commence proceedings in the Tribunal. Counsel for the Respondent conceded that the Respondent as a regulator has a role to consider the merits of complaints before initiation of Tribunal proceedings. However, the fact that the Tribunal found in favour of the Respondent at first instance is a relevant factor. Indeed, the fact that the Respondent was successful at first instance demonstrates that the Respondent's case could not be characterised as one having no tenable basis in fact or law (being a special circumstance as identified in s 60(3)(c)). Consideration 1. In my view, the initial question to be considered is when did time commence to run in respect of any application brought by the Appellant for payment of his costs incurred in the tribunal proceedings brought by the Respondent's predecessor, and which culminated in the orders made on 12 July 2018. Those proceedings were not ultimately determined until the Supreme Court judgment was published on 3 September 2019. Order 2 made by the Supreme Court was to the effect that the proceedings commenced by the predecessor to the Respondent be dismissed. 2. The NCAT Act provides that a "general application" is an application made to the Tribunal for a "general decision" (see s 29). Section 4 of the NCAT Act contains the definition of an "ancillary decision" and that definition includes a decision concerning the awarding of costs in proceedings. 3. The NCAT Rules provide that a general application must be made within the period specified in any enabling legislation or, in any other case, within 28 days from the day on which the applicant became entitled under the enabling legislation to make the application (r 23). 4. In this case we were not taken to any provision of legislation which would specifically impose a deadline for the commencement of an application for costs, and we are of the opinion that therefore the provisions of the NCAT Act and the NCAT Rules determine the time for the commencement of such an application. 5. In my view the Appellant became entitled to make the application for an order for costs following the dismissal of the NCAT proceedings which occurred on 3 September 2019 by the Supreme Court order referred to above. It follows that the Appellant had 28 days from 3 September to file the application. It is not in dispute that the application was not filed until 15 September 2020. It is clearly an application that was filed out of time. 6. I divert to make comment upon the submissions of the Appellant to the effect that the application was not filed out of time because time had not commenced to run. That submission is based upon the notion that the Tribunal decision of 12 July 2018 did not contain an order with respect to costs. Whether that is so or not is, in my respectful view, irrelevant. What is relevant is that those proceedings were dismissed by Supreme Court order made 14 months later on 3 September 2019. In my view the effect of the dismissal was to bring an end to the tribunal proceedings and thereby the Appellant became entitled to make a costs application. 7. The question that then requires consideration is whether time for lodgment of the application for an order for costs should be extended under s 41 of the NCAT Act. 8. Section 41 has been subject of decisions published by the Appeal Panel of the Tribunal. One decision is Jackson v NSW Land & Housing Corporation [2014] NSWCATAP 22. In that decision, the Appeal Panel set out the matters that require consideration when considering whether an extension of time should be given. Those matters are summarised at [22] and are as follows: 1. the length of the delay; 2. the reason for the delay; 3. the Appellant's prospects of success, that is usually whether the Appellant has a fairly arguable case; 4. the extent of any prejudice suffered by the Respondent. 1. In Jackson, the Appeal Panel said that it may be appropriate to go further into the merits of an application, if the explanation for the delay is less than satisfactory, or if the opponent has a substantial case of prejudice and in such a case, it may be relevant whether the applicant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable. 2. In the Decision the Tribunal considered whether time should be extended and found that the application for costs was lodged "just over 12 months" after the Supreme Court judgment. In my view, the application for costs should have been lodged no later than 28 days after 3 September 2019 (ie. by approximately early October 2019) meaning that it was in fact lodged approximately 11 months after the last date for lodgment required by the NCAT Rules. 3. The Tribunal then considered the reasons for the delay. One part of the delay was occasioned by those matters described at [19] of the Decision, namely that from 4 September 2019 to 3 June 2020 the Appellant was "consumed by the attempted application of Penrith City Council Policy LG006, so as to ensure that all identifiable administrative remedies had been exhausted before attempting an application for costs in the Tribunal". In other words, the Appellant appears to have sought to recover costs from a third party and not from the Respondent. 4. The Decision then dealt with the period from 4 June 2020 to 15 September 2020 and stated that no evidence has been provided to confirm the process of seeking reimbursement from the Council or "more relevantly, what occurred between 4 June to 15 September 2020". The Tribunal found that in the absence of any explanation as to why it took a further three months to lodge the application the Tribunal was "not persuaded that there is an adequate explanation of the reasons for the delay in making the application". 5. The Tribunal found that the delay "was significant" [63] and "not adequately explained, having regard to the importance of finality". There is no error of law, in my respectful view, in relation to those findings, nor can it be said that there was an error of fact, potentially justifying the granting of leave to appeal. 6. The Tribunal considered whether any prejudice existed to the Respondent, were time to be extended. The Respondent had submitted that there is prejudice in being deprived of the ability to draw a line under the proceedings and the Tribunal agreed that that factor is a relevant prejudice. In my view, in the circumstances of this case, that factor is linked to the lengthy period of delay adding up to approximately 11 months. In other words, the Respondent had a reasonable entitlement to expect that the Tribunal proceedings would be finalised after the publication of the Supreme Court judgment and a delay of this magnitude point, as the Decision records at [62] counts "against any extension of time". 7. The next factor for consideration is whether the Appellant had reasonable prospects of success or a fairly arguable case. 8. The Appellant's case was based upon the submission that there existed special circumstances warranting an award of costs. The Appellant relied upon s 60(3)(c), (d), (e) and (g) of the NCAT Act. In summary, this meant that the Appellant submitted that the Tribunal, in determining whether special circumstances existed, should have considered the relative strength of the claims made by each of the parties, including whether a party has made a claim that had no tenable basis in fact or law, the nature and complexity of the proceedings and the fact that the proceedings were frivolous or vexatious, or otherwise misconceived or lacking in substance. Finally, under subsection (g) the Appellant relied upon "any other matter" the Tribunal considered relevant. 9. It is relevant that the effect of the Supreme Court judgment was that the Respondent lodged an application before the Tribunal in respect of which the Tribunal had no jurisdiction to make the orders applied for. Such an application could be described as one that made a claim that had no tenable basis in fact or law because one of the claims made was that the Appellant "committed misconduct" "by failing to comply with Council's resolution of 27 July 2015" (see [10] of the decision of 12 July 2018). The proceedings, as constituted by the application, could also be described as being misconceived or lacking in substance. In the Decision, the Tribunal appears to have agreed with such an analysis [74] but went on to say that the Tribunal does not regard the fact that the losing party was ultimately successful where there was ultimately found to be no basis on which the Tribunal could impose a disciplinary sanction on that party, would of itself constitute a special circumstance. 10. The Tribunal agreed that the proceedings were complex [76] and then at [77] found that the "heart" of the Appellant's contention was that there were special circumstances warranting an award for costs because the Appellant was ultimately successful in the Supreme Court. In my view (for reasons upon which I will later elaborate) that description of the heart of the Appellant's contentions gives insufficient weight to the reason that the Appellant was successful, namely because the Respondent's contention of misconduct was based on a resolution which went beyond the Council's power. 11. The Tribunal found that there was nothing inappropriate in the initiation or conduct of the Tribunal proceedings by the Chief Executive and having regard to the way in which the jurisdictional issue was identified and argued, and that the Tribunal did not agree that the ultimate outcome is a special circumstance warranting an order for costs. 12. The Appellant submits that the Tribunal has failed to consider an important factor, namely that the proceeding lacked a jurisdictional basis. In my view, the reference to special circumstances arising in cases where there is no tenable basis in fact or law or where proceedings are misconceived or lacking in substance, may include (inter alia) proceedings which have no jurisdictional basis. This approach was the approach consistently taken in a number of proceedings commenced in the Tribunal by the Council of the Law Society of New South Wales all of which involved the contention (conceded by the Law Society) that the Tribunal did not have jurisdiction to determine the applications because of defects that affected the authority of the Law Society to commence proceedings. The cases to which I refer are Council of the Law Society of New South Wales v Judah [2019] NSWCATOD 135, Council of the Law Society of New South Wales v DRE [2019] NSWCATOD 147 and Council of the Law Society of New South Wales v EBX [2019] NSWCATOD 155. In Judah the Tribunal found that the application had, in the circumstances, no tenable basis in fact or law and was misconceived. It was held that in these circumstances, there were special circumstances warranting an award of costs because the Respondent (the solicitor) had been put to expense by reason of the bringing of the application. DRE and EBX applied the same approach as Judah. 13. In my view there were special circumstances and that those circumstances warranted an award for costs. The fact that there was no jurisdiction is a circumstance coming within s 60(3)(c) because the claim of misconduct lacked a tenable basis, and comes within (e) because the proceedings were misconceived. It was not in dispute that special circumstances are those that can be described as out of the ordinary, but not extraordinary or exceptional. 14. In my view, this is not a case where the statutory framework could have been said to have been unduly obscure or that other Tribunal decisions or court judgments were capable of misleading the Respondent's understanding of the law. The Respondent was alerted to a jurisdictional issue by the Appellant himself: see [63] of the judgment of Basten JA. Although that apparently occurred on a "convoluted basis" it is not said by the Supreme Court or elsewhere that the jurisdictional issue was raised in such a way that it was so obscure as to excuse the Respondent from considering it. The essential conclusion of the Supreme Court was that the allegation that the Appellant failed to comply with Resolution CW11 was dependent upon the Council have a power to compel the conduct required by that resolution. Other than a power to censure, the resolution went beyond power. 15. In EJE v Western Sydney Local Health District [2021] NSWCATAP 247, the Appeal Panel stated at [30], that the terms "lacking in substance" and "misconceived" have been the subject of consideration. With respect to the former phrase, it was held in The Owners Corporation of Strata Plan 4521 v Zouk & Anor [2007] NSWCA 23 at [45] that it means "not reasonably arguable" and in respect of the latter phrase it was held in Alchin v Rail Corporation NSW [2012] NSWADT 142 at [26] that it means a "misunderstanding of legal principle". In coming to the opinions expressed above I have adopted the same understanding of the meaning of those terms. 16. It is important to bear in mind that an order for costs is not intended to punish the unsuccessful party but rather to indemnify the successful party for the expenses that that party has incurred (see Latoudis v Casey (1990) 170 CLR 534 per Mason CJ at 543 and McHugh at 567). Whilst the general position in the Tribunal is that each party should pay their own costs (s 60(1)), the Tribunal may award costs under s 60(2) "only if it is satisfied that there are special circumstances warranting an award of costs". In this case, the Appellant has engaged solicitors and counsel and has therefore been put to expense. 17. As stated above, the language of s 60 of the NCAT Act indicates that the Tribunal has a power to award costs but only if satisfied that there are special circumstances warranting an award of costs. The exercise of a statutory discretion such as this can only be overturned in limited circumstances: House v The King [1936] HCA 40; (1936) 55 CLR 499 at 505-506. Those circumstances were summarised by the Court of Appeal in Hannaford v Commonwealth Bank of Australia [2014] NSWCA 297 at [14] where the court held that any attack on a discretionary decision must fail unless it can be demonstrated that the decision maker: 1. made an error of legal principle; 2. made a material error of fact; 3. took into account some irrelevant matter, 4. failed to take into account, or give gave insufficient weight to, some relevant matter; or 5. arrived at a result so unreasonable or unjust as to suggest that one of the foregoing categories of error had occurred, even though the error in question did not explicitly appear on the face of the reasoning (cited in Clarke v Tapp [2015] NSWCATAP 81). 1. In my respectful view the Tribunal in this case erred in failing to take into account a material fact, namely that the Appellant was successful in having the Tribunal proceedings dismissed by reason of the fact that the Tribunal had no jurisdiction to make the determination requested by the Respondent. Alternatively, it may be said that the Tribunal gave insufficient weight to that relevant matter. It is evident from [77] of the Decision where the Tribunal describes the "heart" of the Appellant's contention that there were special circumstances warranting an order for costs because the Appellant was successful in the Supreme Court that the Tribunal either did not take into account the jurisdictional basis for the Appellants success or gave that matter insufficient weight. Although the Tribunal recognised the existence of a jurisdictional issue, that was counted against the Appellant because of the "way in which the jurisdictional issue was identified and argued". I am not of the view that the Appellant's conduct in raising the jurisdictional issue in a convoluted way constitutes conduct disentitling it to costs if the facts are otherwise that the application lacked a jurisdictional basis and that that circumstance constitutes a special circumstance warranting an award of costs. Accordingly, I am of the opinion that the Tribunal's discretion has miscarried and that an injustice has occurred. 2. For the above reasons, I am of the opinion that the Appellant had good prospects of success and indeed I am of the opinion that there were special circumstances warranting an award for costs. The paramount consideration is the interests of justice which, in my view, leads to the view that the appeal should be upheld. 3. Notwithstanding that view as to the Appellant's prospects of success, the fact remains that the Appellant did not bring the application for costs until after an excessively lengthy period and the reasons for that delay are, in my opinion, inadequate. In Jackson, the Appeal Panel stated that time limits are established by legislation for the purpose of promoting the orderly and efficient conduct of proceedings and providing certainty for the parties. Accordingly, time limits should be strictly enforced [21]. In exceptional cases, where the interests of justice so require, time may be extended. 4. In my view, time should be extended in this case and an order for costs ought to be made against the Respondent. I acknowledge that there is prejudice to the Respondent by further delay in finalising these proceedings, particularly as an order for costs carries with it the subsequent process of the parties negotiating an amount for costs or undertaking the process by which a third party assesses costs. However, that consideration is outweighed in the circumstances of this case by the considerations pointing to the existence of the special circumstances earlier described warranting an award of costs. 5. I propose that the following orders be made: 1. Appeal upheld. 2. Time is extended for lodgment of the Appellant's application for costs in the proceedings below. 3. The Respondent is to pay the costs of the Appellant in the Tribunal proceedings 2017/00212948 as agreed or as assessed. 4. If a party seeks costs of this appeal, they must file and serve submissions with respect to costs within 14 days. 5. If a party receives from the other party a submission as to costs of the appeal, they must file their submissions in response within a further period of 14 days. 6. The submissions of the parties should address the question of whether costs of the appeal may be determined by the Appeal Panel "on the papers" by the Appeal Panel dispensing with a further hearing. 1. G FURNESS SC: I would not grant an extension of time to file the appeal and, if an extension of time was granted, I would dismiss the appeal for the reasons I set out below. 2. I agree with the Deputy President's recitation of the history of the proceedings and his statements as to the relevant legal principles. My dissent concerns whether special circumstances exist to award costs because, in later judicial review proceedings, it was found that the Tribunal lacked jurisdiction to hear the application. That matter is closely related to whether an extension of time should be granted because the prospects of success are a matter to consider when determining an extension. 3. Dealing first with whether special circumstances exist warranting an award of costs. I agree with the Decision and accept the Respondent's submissions as set out in [45(3)] of the Deputy President's decision for the following reasons. 4. First, the initial application was commenced in 2017 by the Respondent. At that time, based on the existing law, the proceedings were not misconceived and did not lack substance. Further, the Respondent made no untenable claim in fact or law. It was only following judicial review proceedings in 2019, that the Supreme Court found that the Tribunal lacked jurisdiction to hear and determine the application. 5. Secondly, as is evident from the decision of Basten JA, the jurisdictional issue on which Basten JA had based his decision was "not front and centre before the Tribunal" and the Appellant did not in any of the grounds "squarely raise(d) the issue of whether non-compliance with resolution CW11 could found the application before the Tribunal". Further, the Decision records the submissions of the Respondent that the submission, successfully made before the Supreme Court was not raised below 'certainly not in the terms it is now raised' [71]. 6. To the extent that the Appellant did raise the issue of whether the Tribunal had jurisdiction, it was only in a convoluted form. Accordingly, the Appellant did not before the Tribunal clearly and unequivocally claim that the proceedings commenced by the Respondent were misconceived or contained an untenable claim for the reasons given by Basten JA. 7. Thirdly, the Supreme Court did not criticise the conduct of the Respondent in commencing or continuing proceedings against the Appellant. Costs were awarded against the Respondent on the basis that, in that jurisdiction, costs usually follow the event. The Supreme Court did not otherwise consider or interfere with the procedural direction in relation to costs before the Tribunal. 8. Fourthly, the Respondent was successful at first instance and as such, the Respondent's case could not be characterised, at that time it was commenced and heard as having no tenable basis in fact or law or being misconceived. 9. Finally, the Tribunal in its Decision, referred to and quoted at length the decision of Basten JA [68]-[74]. In addition, the Tribunal considered the transcript of the Supreme Court proceedings [70]. It cannot be said that the Tribunal failed to consider and give weight to the reason behind the Supreme Court's dismissal of the application before the Tribunal. 10. I agree with the reasons given in the Decision that 'in the context where there is no assumption that costs follow the event, the Tribunal does not regard the fact that the losing party was ultimately successful …would of itself constitute special circumstance' [74]. 11. It follows that I am not satisfied that the Tribunal made any error of legal principle or fact, took into account any irrelevant matter or failed to give weight to some relevant matter or arrived a sufficiently unreasonable or unjust result. As such, none of the circumstances set out in House and The King apply. 12. The Deputy President refers to a number of decisions in the Occupational Division concerning proceedings taken by the Law Society of NSW. I note that neither of the parties sought to rely on any of these decisions. In my view, they are to be distinguished from these proceedings. In each of those proceedings brought by the Law Society of NSW, the real issue for determination was whether the Tribunal had jurisdictional power to deal with the disciplinary proceedings. It was found in each case that it did not. The Tribunal in each case awarded costs to the Respondent on the basis that the proceedings had no tenable basis in law and the Tribunal had no jurisdiction. 13. In the Decision under appeal, the issue of the jurisdiction of the Tribunal as identified by Basten JA was not the 'real issue' or even a substantial issue which was squarely put and argued. 14. Turning then to the application for an order for costs out of time. It is accepted by all that the application by the Appellant was filed out of time. In my view, based on the history set out by the Deputy President, and by reference to s 41, an extension should not be granted. First, the length of delay was considerable; nearly 12 months. Secondly, the reasons for the delay were either not the subject of evidence or to the extent there was evidence, the reasons were not satisfactory. Thirdly, the Respondent has suffered prejudice of the type determined by the Deputy President. Finally, and most importantly, the Appellant's prospects of success, on my view and for the reasons given above, are not good. 15. Accordingly, I would not grant leave to file the application for costs out of time. Orders 1. By reason of s 57(3)(a) of the NCAT Act the orders of the Tribunal are those set out in [75] above. ************ 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: 12 January 2022