Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Abughazaleh v Commissioner of Police, NSW Police Force; Sydney Training Academy Pty Ltd v Commissioner of Police, NSW Police Force [2018] NSWCATOD 210 Hearing dates: On the papers Date of orders: 5 February 2018 Decision date: 05 February 2018 Jurisdiction: Occupational Division Before: Dr J Lucy, Senior Member Decision: In proceedings 2016/00384875 and 2016/00384879: 1. A hearing of the respondent's costs application is dispensed with, pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW). 2. The applicants are to pay the respondent's costs in the amount of $25,481.58. Catchwords: COSTS – Where individual applicant found to have given untruthful evidence - Whether special circumstances warrant an award of costs – Whether applicants' claims had a tenable basis in fact – Whether proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance – Whether findings of dishonesty relevant to costs - Whether indemnity costs should be ordered – Whether Tribunal should make a fixed costs order Legislation Cited: Administrative Decisions Review Act 1997 (NSW) Civil and Administrative Tribunal Act 2013 (NSW) Security Industry Act 1997 (NSW) Cases Cited: 203 Castlereagh Street Pty Limited v Skybloo Holdings Pty Limited [2017] NSWCATAP 29 Ahmed v Commissioner of Police, NSW Police Force [2017] NSWCATAD 73 Ahmed v Commissioner of Police, NSW Police Force [2017] NSWCATOD 113 Brodyn Pty Ltd v Owners Corporation – Strata Plan 73019 (No 2) [2016] NSWCATAP 224 Edmondson Rural Holdings Pty Ltd v Gordon [2017] NSWCATAP 155 Fox v Commissioner of Police, New South Wales Police Force [2016] NSWCATAD 77 Lee v Mavaddat [2005] WASC 68 Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 Mendonca v Tonna [2017] NSWCATAP 176 Naylor v Commissioner of Police, NSW Police Force [2014] NSWCATOD 43 Naylor v Commissioner of Police, NSW Police Force (No 2) [2014] NSWCATOD 120 NU v NSW Secretary of Family and Community Services [2017] NSWCA 221 Obieta v Australian College of Professionals Pty Ltd [2014] NSWCATAP 38 Peng v Chief Commissioner of State Revenue [2009] NSWADT 295 Re Filsell and Comcare [2009] AATA 90 Sydney Training Academy Pty Ltd v Commissioner of Police, NSW Police Force; Abughazaleh v Commissioner of Police, NSW Police Force [2017] NSWCATOD 176 SZBEL v Minister for Immigration & Multicultural & Indigenous Affairs (2006) 228 CLR 152 Wagg v Farthing (No 2) [2015] NSWCATAP 263 Texts Cited: Macquarie Dictionary Online, Macmillan Publishers Australia, 2018. Category: Costs Parties: In 2016/384875: Sydney Training Academy Pty Ltd (Applicant) Commissioner of Police, NSW Police Force (Respondent) In 2016/384879: Mahmoud Abughazaleh (Applicant) Commissioner of Police, NSW Police Force (Respondent) Representation: Counsel: Mr Carney (applicants) Solicitors: Hutchison Lawyers (Applicants in both matters) Bartier Perry Lawyers (Respondent in both matters) File Number(s): 2016/384875; 2016/384879 reasons for decision 1. This is an application by the Commissioner of Police for indemnity costs. The costs were incurred in proceedings in which Mr Abughazaleh and his wholly-owned company, Sydney Training Academy Pty Ltd ("Sydney Training Academy"), sought review of the Commissioner's decisions to revoke their security licences. 2. I have found that there are special circumstances warranting the award of costs. These include that Mr Abughazaleh gave untruthful evidence and that the Commissioner's factual claims were much stronger than those of the applicants, many of the applicants' claims having no tenable basis in fact. 3. I have also found that it is appropriate to award the Commissioner indemnity costs in a fixed sum. I have awarded indemnity costs on the basis that Mr Abughazaleh gave deliberately false evidence. I decided to make a fixed sum costs order primarily because the sum sought was relatively modest in the circumstances and the applicants were responsible for the bulk of the costs incurred. Background 1. Mr Abughazaleh and Sydney Training Academy ("the Applicants") held a security licence and a corporation master security licence respectively under the Security Industry Act 1997 (NSW). The Commissioner revoked those licences and the applicants sought review of the Commissioner's decisions. The two applications were heard together. 2. Following two days of hearing, I affirmed the Commissioner's decisions (see Sydney Training Academy Pty Ltd v Commissioner of Police, NSW Police Force; Abughazaleh v Commissioner of Police, NSW Police Force [2017] NSWCATOD 176 ("the principal decision")). Costs application 1. The Commissioner applied for costs of the proceedings. He sought indemnity costs in the sum of $25,418.58, being solicitor's fees already paid by the Commissioner (excluding GST) and fees to be paid, including legal fees for preparing the submissions on costs (also excluding GST). The Commissioner did not, however, seek costs in respect of the Crown Solicitor's fees. The Crown Solicitor represented the Commissioner in relation to the applicants' constitutional arguments and briefed counsel to appear before the Tribunal and make submissions on the constitutional issue. 2. The primary rule, set out in s 60(1) of the Civil and Administrative Tribunal Act 2013 (NSW) ("NCAT Act"), is that each party to proceedings in the Tribunal is to pay the party's own costs. This is qualified by s 60(2), which provides that 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. Section 60(3) of the NCAT Act set out matters to which the Tribunal may have regard when determining whether there are special circumstances warranting an award of costs, as follows: "(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." 1. The Commissioner relied upon s 60(3)(c), submitting that the applicants' claims had no tenable basis in fact, s 60(3)(e), contending that the proceedings were frivolous or vexatious and lacking in substance, and s 60(3)(g), on the basis that Mr Abughazaleh's dishonesty was relevant to a determination of special circumstances. 2. The Commissioner filed and served evidence in support of the costs application, being an affidavit sworn by the Commissioner's solicitor, Mr Mattson. That evidence was unchallenged and I accept it. 3. Mr Mattson's evidence establishes that, on 9 May 2017, the Commissioner's solicitors emailed a letter to the applicants' solicitors. The letter: 1. confirmed that Mr Abughazaleh and Mr Papadellis were required for cross-examination; 2. expressed the view that the applications had no prospects of success; and 3. invited the applicants to discontinue the proceedings. 1. This letter was sent six days before the first day of the hearing. Decision on the papers 1. The parties were directed to address, in their costs submissions, the question of whether the Tribunal should dispense with a hearing on the issue of costs, pursuant to s 50 of the NCAT Act. The Commissioner submitted that it should do so, whilst the applicants made no submissions on the issue. 2. I am satisfied that the issues for determination can be adequately determined in the absence of the parties by considering the written submissions and other material provided to the Tribunal: NCAT Act, s 50(2). A determination of the costs application on the papers is consistent with the guiding principle set out in s 36(1) of the NCAT Act, being to facilitate the just, quick and cheap resolution of the real issues in the proceedings. 3. Accordingly, I have decided to dispense with a hearing. Are there special circumstances warranting an award of costs? 1. The first matter to consider is whether "special circumstances" exist, warranting an award of costs, within s 60(2) of the NCAT Act. "Special circumstances" refer to circumstances that are out of the ordinary, not necessarily extraordinary or exceptional: see Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]; Wagg v Farthing (No 2) [2015] NSWCATAP 263 at [6]; Edmondson Rural Holdings Pty Ltd v Gordon [2017] NSWCATAP 155 at [14]. Did applicants' claims have a tenable basis in fact? 1. One of the matters the Tribunal may consider, when determining whether there are special circumstances warranting an award of costs, is 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 (NCAT Act, s 60(3)(c)). The word "tenable" should be given its ordinary meaning. The Macquarie Dictionary defines it to mean, and I accept that it means, "capable of being held, maintained, or defended, as against attack or objection". 2. The Commissioner submits that the applicants' applications, and particularly their explanations for their conduct, had no tenable basis in fact. The Commissioner submits that their explanations were weak and destined to fail in light of the documentary evidence. Further, it is submitted, the applicants knew that the explanations given to the Tribunal were false and that they deliberately attempted to mischaracterise events. 3. The Commissioner relies upon a number of findings in the principal decision in respect of the applicants' claims, including: 1. Mr Abughazaleh's claim that he believed he was permitted to provide training for the Certificate II in Security Operations. The Tribunal found that it was not reasonable to hold this belief, after receiving correspondence from the Commissioner about the circumstances in which he could provide such training. It also found that, at the very least, it was reckless for Mr Abughazaleh to provide security training after receiving the letter (principal decision at [72]); 2. Mr Abughazaleh's claim, in oral evidence, that he had ceased providing training in New South Wales in May 2013. The Tribunal found that Mr Abughazaleh trained students in New South Wales after that time (at [76], [79]); 3. Mr Abughazaleh's claim that Sydney Training Academy did not provide training in New South Wales. The Tribunal found that this claim was false (at [80]); 4. Mr Abughazaleh's evidence that he had obtained the number of his witness, Mr Papadellis, from the respondent's documents and did not know him prior to the proceedings. The Tribunal found, primarily on the basis of documentary evidence, that this evidence was untruthful and that Mr Abughazaleh already knew Mr Papadellis prior to receiving the documents filed by the Commissioner (at [91]); 5. The applicants' claim that Mr Papadellis had done a one-day first aid course on 17 March 2017. The Tribunal found this claim to be false (at [89]); 6. The applicants' claim that Mr Papadellis moved to Queensland and completed a course there. The Tribunal rejected this proposition, finding instead that Mr Papadellis completed a course with Sydney Training Academy in New South Wales (at [98]); 7. The applicants' claim that Sydney Training Academy did not conduct training courses. This claim was rejected (at [106]-[107]), the Tribunal finding Mr Abughazaleh's evidence to be "disingenuous" and "not honest"; 8. Mr Abughazaleh's evidence that he had no knowledge of his students obtaining New South Wales licences under mutual recognition legislation and that he did not provide them with the relevant forms. This evidence was rejected (at [112]-[113]), the Tribunal finding that it was not credible and that Mr Abughazaleh "deliberately attempted to deceive both the Commissioner and the Tribunal as to his security training activities and his involvement in the mutual recognition scheme" (at [121]). 1. The applicants submit that the fact that the Tribunal made adverse credit findings against Mr Abughazaleh ought not, of itself, to establish "special circumstances." The applicants submit that Mr Abughazaleh still denies he gave untruthful evidence (although they have not tendered evidence to support this) and that many of the Tribunal's findings as to his untruthfulness were not put to him in cross-examination. The applicants have not identified which findings of fact concern matters which were not put to Mr Abughazaleh in cross-examination. 2. The applicants do not explain the relevance of their submission that many of the findings concerning Mr Abughazaleh were not put to him in cross-examination. This submission does not support their case. 3. The first reason for this is that, even if the claim is factually sound, it would not necessarily mean that the Tribunal proceeded unfairly or made an error of law. In SZBEL v Minister for Immigration & Multicultural & Indigenous Affairs (2006) 228 CLR 152 at 165-166, Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ said of proceedings in the Refugee Review Tribunal, where the respondent generally did not participate in the proceedings: It is not necessary (and often would be inappropriate) for the Tribunal to put to an applicant, in so many words, that he or she is lying, that he or she may not be accepted as a witness of truth, or that he or she may be thought to be embellishing the account that is given of certain events. The proceedings are not adversarial and the Tribunal is not, and is not to adopt the position of, a contradictor. But where, as here, there are specific aspects of an applicant's account, that the Tribunal considers may be important to the decision and may be open to doubt, the Tribunal must at least ask the applicant to expand upon those aspects of the account and ask the applicant to explain why the account should be accepted. 1. It follows that in proceedings in this Tribunal, where both parties are represented, it is not always necessary for the Tribunal to put to an applicant that he is lying or to refrain from making findings about the applicant's credit if that is not put to the applicant in cross-examination. I am satisfied that Mr Abughazaleh was put on notice that the Commissioner challenged each of the claims set out above and that the Commissioner's position was that Mr Abughazaleh was untruthful. I note further that it is not necessary for a party to put allegations to a witness in cross-examination if the witness is on notice of the allegations: NU v NSW Secretary of Family and Community Services [2017] NSWCA 221 at [58]. 2. The second reason why the claim is not relevant is that I am not entitled to revisit my findings of fact in the principal proceedings when determining an application for costs. Any challenge to those findings would more properly be the subject of an appeal. 3. The applicants also submitted that the finding that Mr Abughazaleh provided training "either knowing that the provision of training was in breach of his licence conditions, or being reckless as to whether it was in breach of the conditions" (principal decision at [72]) failed to refer to a part of Mr Abughazaleh's evidence. This was said to be his reference in an affidavit to a statement on the Commissioner's website that the passage of certain Commonwealth legislation meant that the Security Licensing and Enforcement Directorate could not regulate security training activities. 4. I am not entitled to revisit my findings of fact in a costs application or, if I am, I do not consider that it is appropriate to do so in this case. However, even if this particular finding was factually incorrect or legally erroneous, the other factual findings are sufficient to justify the conclusions to which I have come in this decision about the weakness of many of the applicants' factual claims. 5. I find that the legal and factual claims made by the Commissioner were much stronger than those made by the applicants. I also find that the claims made by the applicants, set out in paragraph [19] above, with the possible exception of the claim in paragraph [19](1), had no tenable basis in fact. There was little if any documentary evidence to support them, and almost all the documentary evidence went against them. For example, photographs of mutual recognition forms kept by Mr Abughazaleh at the premises of the Sydney Training Academy tended to undermine his claims that he had no knowledge that his students would seek mutual recognition of their Queensland qualifications (see [19](8) above). Similarly, a photograph of a sign outside the Sydney premises of Sydney Training Academy, representing that it conducted training courses in security, tended to undermine Mr Abughazaleh's evidence that that organisation did not conduct security training in New South Wales (see [19](3) and (7) above). Records of telephone conversations and text messages between Mr Abughazaleh and Mr Papadellis tended to show that they knew each other (see [19](4) above). In most cases, the only evidence in support of the factual claims made by the applicants was that of Mr Abughazaleh, whose evidence I found to be unreliable, or Mr Papadellis, whose evidence also proved unreliable, and who was not produced for cross-examination despite the Commissioner's clear request that he attend the hearing for that purpose. Whether proceedings were frivolous, vexatious or lacking in substance 1. The question of "whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance" is a matter to which the Tribunal may have regard when determining whether there are special circumstances which warrant an award of costs (NCAT Act, s 60(3)(e)). 2. Similar language is used in s 55(1)(b) of the NCAT Act, which provides that the Tribunal may dismiss proceedings if it considers that they are "frivolous or vexatious or otherwise misconceived or lacking in substance." 3. As Senior Member Walker has commented, the words "frivolous" and "vexatious," used together, may signify that the application lacks a legal foundation or that it is "not legally properly based". Fox v Commissioner of Police, New South Wales Police Force [2016] NSWCATAD 77 at [26], [28]. The term "vexatious" "can include proceedings brought with the intention of annoying or embarrassing or harassing the other party, or for some collateral purpose other than having the court or tribunal adjudicate on the issues raised by the proceedings, or, irrespective of the motive of the litigant, if the proceedings are 'so obviously untenable or manifestly groundless as to be utterly hopeless'": Re Filsell and Comcare [2009] AATA 90 at [33], cited in Fox v Commissioner of Police, New South Wales Police Force [2016] NSWCATAD 77 at [28]. 4. On balance, I am not satisfied that the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance. The applicants sought a merits review of the decisions concerning their security licences, as they were entitled to do. Whilst many of the claims made were untenable, the applications did not lack a legal foundation. Nor were they brought for a collateral purpose or to annoy the Commissioner. I am not persuaded that the proceedings were "utterly hopeless" in the requisite sense. It is unlikely that they would have been summarily dismissed at the outset, should the Commissioner have applied for such an order. Relevance of findings of dishonesty made against Mr Abughazaleh 1. The last item in the list of matters to which the Tribunal may have regard when determining whether special circumstances exist is "any other matter that the Tribunal considers relevant" (NCAT Act, s 60(3)(e)). This gives the Tribunal a broad discretion as to the matters it chooses to take into account when determining whether special circumstances warrant an award of costs. 2. I am satisfied that a party's dishonesty is a relevant matter to take into account in the exercise of this discretion. Where a party brings proceedings which are based upon evidence the Tribunal finds to be untruthful, the party is using the tribunal processes for fraudulent ends. The other party is put to the time and expense of responding to proceedings which are, to some extent at least, not brought and pursued in good faith. This circumstance is "out of the ordinary": Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]. 3. In this case, Sydney Training Academy, a corporation which can only act through individuals, was not itself dishonest. However, given that Mr Abughazaleh was its only shareholder and director, and gave evidence on the company's behalf, I am satisfied that the findings that his evidence was untruthful is a relevant factor when determining whether special circumstances exist in the proceedings concerning that company's master licence. 4. Another circumstance which is relevant to determining whether special circumstances exist is the letter sent by the solicitors for the Commissioner to the applicants' solicitors six days before the hearing, expressing the opinion that "Mr Abughazaleh is aware he engaged in the conduct alleged" and that "[c]onsistent with decisions of Naylor and Ahmed (which have previously been brought to his, and your, attention), the Applications have no prospects of success." The cases referred to in the letter are Naylor v Commissioner of Police, NSW Police Force [2014] NSWCATOD 43 and Ahmed v Commissioner of Police, NSW Police Force [2017] NSWCATAD 73. Both of these cases involved applicants who had participated in schemes assisting students to obtain a Queensland security licence for the purpose of then obtaining a New South Wales licence through the mutual recognition legislation. In both cases, the Tribunal affirmed the decision to revoke the applicants' security licences and found that it was not in the public interest for them to hold those licences. One reason for coming to this conclusion was that they were involved in a scheme whereby "the rigours of the NSW security licensing regime can be avoided by NSW residents" (Naylor v Commissioner of Police, NSW Police Force [2014] NSWCATOD 43 at [86]; Ahmed v Commissioner of Police, NSW Police Force [2017] NSWCATAD 73 at [47], [50]). 5. I did not decide to affirm the Commissioner's decision in reliance upon the cases of Naylor and Ahmed. However, I did find that Mr Abughazaleh had participated in a scheme to allow New South Wales residents to obtain security licences through mutual recognition, in circumstances where he denied having done so. I consider that it is relevant to take into account the letter from the solicitor for the Commissioner to the applicants' solicitor, inviting them to discontinue the proceedings because they had no prospects of success. I note that the Tribunal found an equivalent letter to be a relevant factor when determining to award costs (albeit under a different costs provision) in Naylor v Commissioner of Police, NSW Police Force (No 2) [2014] NSWCATOD 120 at [12]. This was due to the persistence of the applicant in that case after the futility of the applicant's position had been pointed out to her. The same principle applies here. Conclusion as to special circumstances 1. If a costs applicant establishes that some of the circumstances in s 60(3) apply, it does not necessarily follow that a costs order should be made. The Tribunal must "weigh whether those circumstances are sufficient to amount to 'special' circumstances that justify departing from the ordinary rule that each party bear their own costs": Obieta v Australian College of Professionals Pty Ltd [2014] NSWCATAP 38 at [81]. Even where special circumstances exist, the Tribunal has a discretion to exercise in deciding what, if any, order should be made (Brodyn Pty Ltd v Owners Corporation – Strata Plan 73019 (No 2) [2016] NSWCATAP 224 at [21], [24]). 2. I am satisfied that there are special circumstances warranting an award of costs, having regard to the dishonesty of Mr Abughazaleh, the relative strengths of the claims made by each of the parties, including that the applicants made claims that had no tenable basis in fact, and the circumstance that the futility of the proceedings were pointed out to the applicants prior to the hearing. 3. The Tribunal is required to take into account the principles applicable to awarding costs generally when making an order under s 60(2) of the NCAT Act. As the Appeal Panel said in Brodyn Pty Ltd v Owners Corporation – Strata Plan 73019 (No 2) [2016] NSWCATAP 224 at [24]: "These include: Costs are compensatory: see Latoudis v Casey (1990) 170 CLR 334; That an unsuccessful party bears the costs of the successful party: Oshlack v Richmond River Council [1998] HCA 11 at [134]; Whether, by reason of the relative success of the parties on different issues and the time taken to determine those that an order for costs based on issues should be made; see eg Bostick Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304." 1. I consider that it is appropriate to compensate the Commissioner for the costs of the proceedings, given that the applicants were unsuccessful and in light of the special circumstances set out above. The next matter to deal with is the Commissioner's submission that he should be awarded indemnity costs. Whether indemnity costs should be awarded 1. In support of his application for indemnity costs, the Commissioner contended that the applicants' applications "were based on a falsehood and wilful disregard for the known facts". I accept that this is the case. As the Commissioner submitted, Peng v Chief Commissioner of State Revenue [2009] NSWADT 295 at [102]-[104] and the cases discussed therein establish that knowingly giving false evidence is a circumstance which may justify an award of indemnity costs. 2. More recently, in Mendonca v Tonna [2017] NSWCATAP 176 at [59]-[64], the Appeal Panel set out the principles applicable to the award of indemnity costs, observing: "59 Indemnity costs are only awarded in limited circumstances. The discretion to do so must be the subject of careful reasoning (Degmam Pty Ltd (In Liq) v Wright (No 2) [1983] 2 NSWLR 354) and caution should be exercised in making such an award: Leichhardt Municipal Council v Green [2004] NSWCA 341; Ng v Chong [2005] NSWSC 385 at [13]. 60 Other than in relation to the unreasonable refusal of a genuine offer of settlement, one circumstance in which indemnity costs may be awarded is when a case is commenced or continued where there is no chance of success (Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No 2) [2009] NSWCA 12 at [4]), such as where the claim is "without substance", "groundless", "fanciful or hopeless" or so weak as to be futile, such as where a limitation period is obviously at an end: Hillebrand v Penrith Council [2000] NSWSC 1058. However, mere weakness of a case will not be sufficient to warrant an exercise of the discretion to award indemnity costs: Wentworth v Rogers (No 5) (1986) 6 NSWLR 534. … 62 Another circumstance which may warrant an order for costs on an indemnity basis is where the proceedings amount to an abuse of process: BaillieuKnight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359 at 362. Examples of abuse of process include where the proceedings are commenced other than in good faith or for an ulterior or collateral purpose: Palmer v Gold Coast Newspapers Pty Ltd [2013] QSC 352; Packer v Meagher [1984] 3 NSWLR 486 at 500. … 63 An award of indemnity costs may also be made for unreasonable conduct. Such conduct may include unnecessarily prolonging the proceedings, (Degmam Pty Ltd (in liq) v Wright (No 2), at 358); unfounded allegations of fraud or improper conduct (Maule v Liporoni (No 2) (2002) 122 LGERA 216 at 229); deliberate or high-handed conduct (Rouse v Shepherd (No 2) (1994) 35 NSWLR 277) and behaviour which causes unnecessary anxiety, trouble or expense, such as the failure to adhere to proper procedure (FAI General Insurance Co Ltd v Burns (1996) 9 ANZ Ins Cas 61-384). Disregard of court orders may justify an indemnity costs order (O'Keefe v Hayes Knight GTO Pty Ltd [2005] FCA 1559 at [35]). Perverse persistence by an unrepresented litigant with a hopeless application may also do so: Rose v Richards [2005] NSWSC 758. 64 Misconduct of a serious nature, such as fraud, perjury, contempt or dishonest conduct may also justify costs being awarded on an indemnity basis: Berkeley Administration Inc v McClelland [1990] FSR 565 at 568–569; Ivory v Telstra Corporation Ltd [2001] QSC 102); Vance v Vance (1981) 128 DLR (3d) 109 at 122." 1. The most relevant of the circumstances identified by the Appeal Panel in Mendonca v Tonna which may justify an award of indemnity costs is misconduct of a serious nature such as fraud, perjury, contempt or dishonest conduct. I have found that Mr Abughazaleh gave false evidence, both on his own behalf and that of the Sydney Training Academy. He also persisted in his application and that of the Sydney Training Academy "in wilful disregard of the known facts" (Lee v Mavaddat [2005] WASC 68 at [23]; Peng v Chief Commissioner of State Revenue [2009] NSWADT 295 at [103]). This is serious misconduct, which justifies an award of indemnity costs against him and against the company he wholly controls. Whether costs should be awarded in a fixed sum 1. The Commissioner's evidence establishes that the amount of the legal costs incurred by the Commissioner (excluding the costs of the Crown Solicitor and counsel engaged by the Crown Solicitor) is $25,418.58 (excluding GST). The solicitor's invoices are annexed to a solicitor's affidavit and appear to be fair and reasonable. The applicants did not submit that they were not or make any submission in respect of the Commissioner's evidence. I accept the Commissioner's evidence that legal fees from the relevant law firm are charged at significantly reduced rates, obtained under tender. 2. The Tribunal is empowered to make a fixed sum costs order, by s 60(4)(a) of the NCAT Act, which gives the Tribunal discretion to determine "to what extent costs are to be paid": 203 Castlereagh Street Pty Limited v Skybloo Holdings Pty Limited [2017] NSWCATAP 29 at [35]. In 203 Castlereagh Street, the Appeal Panel said at [39]-[40]: "39. The principles concerning when a Court might make a gross sum costs order are set out in a number of recent Court of Appeal decisions, including: Hamod v State of New South Wales [2011] NSWCA 375 at [813]ff; eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd (No 2) [2015] NSWCA 422 at [8]ff and [30]; and Kostov v Zhang (No 2) [2016] NSWCA 279 at [19]ff. 40. These principles, relevantly adapted to the circumstances of the Tribunal, include: (1) A fixed sum costs order involves a departure from the usual process by which costs are assessed in accordance with the statutory procedures now relevantly found in the Legal Profession Uniform Law Application Act 2014 (NSW) (especially Pt 7 dealing with "ordered costs") and the Legal Profession Uniform Law (NSW), eInduct Systems at [8]; (2) A fixed sum costs order may be appropriate where: (a) the sum of costs in question is relatively modest, eInduct Systems at [30]; (b) a party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment, Hamod at [813], [816] and [817], eInduct Systems at [30]; (c) the assessment of costs would be protracted and expensive, Hamod at [813] and [817]; and/or (d) the case was complex, Hamod at [815]-[817]; (3) Sections 36(1) and (4) of the NCAT Act (which can be seen as equivalent to those in ss 56(1), 57(1)(d) and 60 of the CP Act) suggest that the following factors merit particular consideration: (a) the relative responsibility of the parties for the costs incurred; (b) the degree of any disproportion between the issue litigated and the costs claimed; (c) the complexity of the proceedings in relation to their cost; and (d) the capacity of the unsuccessful party to satisfy any costs liability, Hamod at [816], Kostov at [22]. (4) An order for fixed sum costs should be based on an informed assessment of the actual costs, having regard to the information before the Tribunal. Furthermore, the approach taken to estimate the costs must be logical, fair and reasonable. This may involve an impressionistic discount of the costs actually incurred in order to take into account the contingencies that would be relevant in any formal costs assessment, Hamod at [820]; (5) The power to make a fixed sum costs order should only be exercised when the Tribunal considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available, Hamod at [813], Kostov at [23]." 1. I consider that the sum claimed, although not a small sum, is relatively modest. It represents the cost of two merits review proceedings which were factually complex and in which the applicant raised constitutional arguments. Although the Commissioner did not apply for the costs of the Crown Solicitor or counsel in running those arguments, they protracted the proceedings. The sum claimed does not include the goods and services tax charged on solicitor's fees and it does not include the Commissioner's costs in responding to the constitutional argument (in which counsel was briefed). The fees are discounted fees. 2. I have no evidence as to the ability of the applicants to meet any order likely to result from the assessment; however, any such order is unlikely to be greater than the sum claimed. If costs were assessed, the applicants would also have to contribute to the costs of assessment. 3. I have no evidence as to the likely cost or time frame of a costs assessment. 4. I consider that, for a review of the merits of an administrative decision, the case was both factually and legally complex. There were many contested factual issues which are each dealt with in the principal decision. 5. I am satisfied that the applicants were responsible for the bulk of the costs incurred. They ran a constitutional argument which was very weak and which protracted the proceedings. Mr Abughazaleh and Mr Papadellis gave untruthful evidence which added significantly to the time taken to review the Commissioner's decision. 6. There is no disproportion between the costs claimed and the issues litigated. 7. I consider that it is "logical, fair and reasonable" to order the applicants to pay the Commissioner's costs in the fixed sum of $25,481.58 (see 203 Castlereagh Street Pty Limited v Skybloo Holdings Pty Limited [2017] NSWCATAP 29 at [40](4)). This amount represents only a portion of the Commissioner's costs. The applicants made no submission that a fixed costs order would be inappropriate, nor that the amount was unreasonable, notwithstanding that the Commissioner clearly sought an order for costs in this amount. In addition, the circumstance that I have decided to award indemnity costs means that the full amount of the Commissioner's costs which are claimed is an appropriate sum. Orders 1. I make the following orders in proceedings 2016/00384875 and 2016/00384879: 1. A hearing of the respondent's costs application is dispensed with, pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW). 2. The applicants are to pay the respondent's costs in the amount of $25,481.58. 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: 20 April 2023