CITATION: McGuirk v NSW Ombudsman (No 3) [2008] NSWADT 242 DIVISION: General Division APPLICANT Gerard Michael McGuirk PARTIES: RESPONDENT NSW Ombudsman FILE NUMBER: 053250; 063028 HEARING DATES: On the papers SUBMISSIONS CLOSED: 23 April 2008 DATE OF DECISION: 29 August 2008 BEFORE: Montgomery S - Judicial Member CATCHWORDS: Freedom of Information Act - Access to documents - Operation of agencies MATTER FOR DECISION: Costs LEGISLATION CITED : Freedom of Information Act 1989 Hawke v Chief Executive Officer, WorkCover NSW (No.2) (GD) [2008] NSWADTAP 45 McGuirk v NSW Ombudsman [2008] NSWADTAP 20 McGuirk v NSW Ombudsman (No 3) [2007] NSWADT 269 CASES CITED: McGuirk v University of New South Wales [2005] NSW ADT 286 McGuirk v Commissioner of Police, NSW Police [2007] NSWADT 119NZ v New South Wales Department of Housing (No.3) [2008] NSWADT 73 Sarker v World Best Holdings Limited (No.5) [2008] NSWADT 179 Vice-Chancellor, University of New South Wales v Curtin and McGuirk; Curtin v Vice-Chancellor, University of New South Wales (Interlocutory Applications) [2006] NSW ADT 271 Applicant In person REPRESENTATION: Respondent T Lowe, solicitor ORDERS: Mr McGuirk's application for costs is dismissed. The issue of whether or not a report should be made under section 58 of the FOI Act is stood over until a decision is handed down in matter No. 073305. REASONS FOR DECISION 1 The two substantive applications related to requests made by Mr McGuirk to the New South Wales Ombudsman ("the Ombudsman") under the Freedom of Information Act 1989 ("the FOI Act"). In his applications Mr McGuirk sought access to a number of documents held by the Ombudsman. The Ombudsman released some documents but rejected the request in regard to the remaining documents citing section 9 and Schedule 2 of the FOI Act. The Ombudsman asserted that those documents fell within the complaint handling, investigative and reporting functions of the office. If that were the case, the Tribunal would have no power to consider the applications. 2 In McGuirk v NSW Ombudsman (No 3) [2007] NSWADT 269 I agreed with the Ombudsman's argument that the documents are reasonably categorised as falling within the scope of the Schedule 2 provision and accordingly, that the Tribunal has no jurisdiction to hear and determine either of Mr McGuirk's applications. The matter was relisted in order to determine the future conduct of the matters. 3 On 2 April 2008 Mr McGuirk made an application for an order that the Ombudsman pay his costs in relation to his applications. A timetable was set for the filing of further material in relation to that application and it was agreed between the parties that the matter should be decided by the Tribunal on the basis of the material filed without the need for further hearing. Applicable legislation 4 The Tribunal has power to award costs pursuant to the provisions of section 88 of the Administrative Decisions Tribunal Act 1997 ("the ADT Act"). Section 88(1) provides: 88 Costs (1) Subject to the rules of the Tribunal and any other Act or law, the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that there are special circumstances warranting an award of costs. 5 The Tribunal's Practice Note Number 12 provides, relevantly, the following examples of special circumstances that may justify a costs order pursuant to section 88(1): "Special circumstances that may justify a costs order 2. The following are some examples of special circumstances that may justify a costs order. The Victorian and Civil Administrative Tribunal Act 1998 costs provisions have been cited in a number of this Tribunal's decisions and the relevant sections form part of the following list of examples. The examples are not exhaustive: whether a party has conducted the proceeding in a way that disadvantaged another party to the proceeding by conduct such as: (i) failing to comply with an order or direction of the Tribunal without reasonable excuse; (ii) failing to comply with this Act, the regulations, the rules or an enabling enactment; (iii) asking for an adjournment as a result of (i) or (ii); (iv) causing an adjournment; (v) attempting to deceive another party or the Tribunal; (vi) vexatiously conducting the proceeding; whether a party has been responsible for prolonging unreasonably the time taken to complete the proceeding; 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; ..." Mr McGuirk's Contentions 6 In this application for costs, Mr McGuirk asserts that the Ombudsman's conduct in the handling of the applications represents special circumstances warranting an award of costs against the Ombudsman. He says that special circumstances in respect of these proceedings are clearly made out in that officers of the Ombudsman have sought to avoid their obligations under the FOI Act for well over two years. He points to what he refers to as "sustained attempts by an agency to avoid its obligations under the FOI Act" costing the agency, the applicant, the Tribunal and the New South Wales public some tens of thousands of dollars. He contends that in these circumstances costs should be awarded. 7 Mr McGuirk refers to previous decisions of the Tribunal in which costs have been awarded. He says that the Tribunal has awarded costs against him on three separate occasions. The relevant decisions are McGuirk v University of New South Wales [2005] NSW ADT 286, Vice-Chancellor, University of New South Wales v Curtin and McGuirk; Curtin v Vice-Chancellor, University of New South Wales (Interlocutory Applications) [2006] NSW ADT 271 and McGuirk v NSW Ombudsman [2008] NSWADTAP 20. He set out the background of each of those matters and cites passages from decisions in those matters. Mr McGuirk contends that he has made application for costs against government agencies, on numerous occasions, on the basis that they have failed to comply with their obligations under the FOI Act, and, in so doing, have wasted not only his time and resources, but also scarce public resources. Those applications have been unsuccessful. He says that the consequence of the repeated failure by the Tribunal to address the repeated failures by agencies, such as the Ombudsman, to comply with their obligations under the FOI Act is that such agencies have little or no incentive to comply with those obligations. 8 Mr McGuirk submits that in respect of applications for costs orders to date, it is clear that there has been one rule for agencies and another rule for applicants. He contends that in conducting itself in this way, the Tribunal has breached its obligations under the ADT Act itself and at common law. 9 He says that the Tribunal is under a clear obligation to make an award of costs against the Ombudsman. He submits that for the Tribunal to decline to award costs in his favour in this matter would be a clear failure by the Tribunal to act judicially. It would provide further evidence of a pro-agency bias on the part of the Tribunal, and further undermine the confidence of applicants in the freedom of information regime in this State. 10 Mr McGuirk has also sought a report under section 58 of the FOI Act to bring matters to the attention of the responsible Minister. He has requested that a decision on that issue be stood over until a decision is handed down in matter No. 073305. The Ombudsman's Contentions 11 The Ombudsman argues that Mr McGuirk has failed to overcome either of the 'two hurdles' to obtaining a costs order that were referred to by Judicial Member Higgins in McGuirk v Commissioner of Police, NSW Police [2007] NSWADT 119. The Ombudsman submits that Mr McGuirk has failed to identify the existence of 'special circumstances' at all, or to demonstrate any 'special circumstances' that would warrant an award of costs against the Ombudsman under section 88 of the ADT Act. Further, the Ombudsman argues that Mr McGuirk has failed to identify either the nature or the amount of costs sought. 12 The Ombudsman refers to the Tribunal's Practice Note Number 12 and in particular to the matters set out in paragraph 2 of the Practice Note, and submits that none of the matters referred to in paragraph 2 could be reasonably seen as having application to the conduct of the proceedings by the Ombudsman. It is the Ombudsman's submission that, on any balanced assessment of the course of the substantive proceedings, there is no evidence to suggest that the conduct of the Ombudsman in these proceedings has been other than reasonable and even-handed, causing no disadvantage of the relevant type to Mr McGuirk. 13 The Ombudsman submits that Mr McGuirk's costs application has no real prospect of success given that I dismissed his applications for review and that, the Appeal Panel dismissed Mr McGuirk's appeal against my decision and awarded costs in favour of the Ombudsman. 14 The Ombudsman further submits that issues to which Mr McGuirk has referred in support of his application are irrelevant and of no assistance to the Tribunal in respect of the costs application. The Ombudsman submits that Mr McGuirk's articulation of the purported "consequences of the failure by the Tribunal to address the conduct of agencies" and the purported "pro-agency bias on the part of the Tribunal" contained in his submissions is likewise irrelevant and of no assistance to the Tribunal in respect of the application. 15 The Ombudsman submits that Mr McGuirk has failed to demonstrate that the Ombudsman has engaged in conduct of the type referred to in points (i) to (vi) of paragraph 2 of the Practice Note, or in any other type of conduct that might constitute special circumstances for the purposes of section 88(1) of the ADT Act. Further, the Ombudsman submits that Mr McGuirk has also failed to demonstrate that he has suffered any disadvantage of a type that might enliven the discretion of the Tribunal to make an award of costs. 16 In the Ombudsman's submission, Mr McGuirk has made out no special circumstances and the Tribunal is entitled, in these circumstances, to find that his costs application lacks merit. In light of the matters set out above, the Ombudsman requests the Tribunal to dismiss the application and make no order for costs. The general principles to be applied 17 The Tribunal's normal expectation is that the parties in Tribunal proceedings should bear their own costs. Where there are 'special circumstances', the Tribunal has a discretion to award costs pursuant to the provisions of section 88 of the ADT Act. The Tribunal does not follow the usual approach in judicial proceedings whereby the successful party can expect an order for costs: NZ v New South Wales Department of Housing (No.3) [2008] NSWADT 73. 18 The Tribunal has considered the provisions of section 88 of the ADT Act in numerous matters, primarily in the Retail Leases Division. 19 The Tribunal's President recently considered the issue of 'special circumstances' in the Appeal Panel matter of Hawke v Chief Executive Officer, WorkCover NSW (No.2) (GD) [2008] NSWADTAP 45. In awarding costs against the appellant he stated: 10 What circumstances may amount to 'special circumstances' attracting a costs order has been the subject of numerous decisions in the Tribunal and at Appeal Panel level. There is also a Practice Note, No 12, giving guidance on the way the Tribunal might exercise the discretion. 11 The external merits review of administrative decisions by government agencies and decision-makers serves an important public purpose. The last of the objects listed in section 3 of the Act is: '(g) to promote and effect compliance by administrators with legislation enacted by Parliament for the benefit of the citizens of New South Wales.' 12 In keeping with this object, citizens should not be unduly deterred from applying to the Tribunal for review of adverse decisions affecting them. The costs rule in section 88(1) displaces the standard rule applying in the ordinary courts, of costs-follow-the-event. 13 It is rare in the merits review jurisdiction of the Tribunal to see government agencies apply for costs at the first instance level when a citizen fails in obtaining an order from the Tribunal varying or setting aside the challenged decision. 14 This is, as I see it, as it should be. The conduct of applicants for review would have to be quite extreme in the way in which they have presented their cases or in bringing the proceedings in the first place before any order for costs at first instance would be warranted. Some of the circumstances that might fit this description are dealt with in the Practice Note. 15 But, as I see it, there is a case for a less non-interventionist standard to be applied to appeals. If the losing party at first instance (whether citizen or administrator) brings forward an unmeritorious appeal, the other party should be given some protection from having to go around the course a second time. The Practice Note states: 'Special circumstances that may justify a costs order 2. The following are some examples of special circumstances that may justify a costs order. … - 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; … 20 The general principles to be applied in relation to an application for costs in the Retail Leases Division were recently set out in the decision in Sarker v World Best Holdings Limited (No.5) [2008] NSWADT 179 where the Tribunal stated: "28 If costs are to be awarded, the requirement of 'special circumstances warranting an award of costs' set out in section 88(1) of the ADT Act must be satisfied. Section 77A of the RL Act makes this provision applicable in retail tenancy proceedings conducted in the Tribunal. 29 For present purposes, the relevant parts of section 88 are subsections (1) and (2), which state: (1) Subject to the rules of the Tribunal and any other Act or law, the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that there are special circumstances warranting an award of costs. (2) 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 Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis. 30 The case-law on section 88(1) in its application to proceedings under the RL Act includes one Court of Appeal decision ( Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81) and a considerable number of Tribunal decisions, both at first instance and in appellate proceedings (see for example Alessa Pty Ltd v Total & Universal Pty Ltd [2001] NSWADT 150, Gizah Pty Ltd v AXA Trustees Ltd (No 2) [2001] NSWADT 164, Citadin Pty Ltd (No 2) v Eddie Azzi Australia Pty Ltd & General Pants Pty Ltd (RLD) [2001] NSWADTAP 31, Wood & Anor v Bergman (No 2) [2003] NSWADT 175 and Sotiropoulos v Mattana Coiffure Pty Ltd (No 2) (RLD) [2004] NSWADTAP 43). 31 'Special circumstances' are defined in the case law as 'circumstances that are out of the ordinary, but without having to be extraordinary or exceptional'. It is not enough that the circumstances are 'special': they must also 'warrant' an order for costs. On account of the 'commerciality' of the Retail Leases Division, the interpretation of 'special circumstances' differs significantly from the interpretation that might be adopted in any other Division of the Tribunal. While various categories of 'special circumstances' have been identified in the case law, these categories are not closed. 32 In Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81, the Court of Appeal held that the costs of proceedings in the Tribunal under the RL Act, both at first instance and on appeal, should be awarded against the lessors. At [60], Santow JA (with whom Mason P and Brownie AJA agreed) stated that the lessors 'so acted as by their conduct to give rise to special circumstances; that is, circumstances that were clearly out of the ordinary and grossly unreasonable so far as the respondent tenant was concerned'. He pointed out that by virtue of this conduct, the tenant was 'forced to pursue this litigation'. He also said: 'While a finding of "serious unfairness" is not prerequisite to determining that there are special circumstances, it is nonetheless a highly relevant consideration.' 33 Amongst the various types of situation that have been held to constitute 'special circumstances' in retail leases cases, one is where the proceedings instigated, or the grounds of defence raised, by the party against whom a costs order is sought are found to have lacked any real prospect of success and therefore to have been unmeritorious. In such circumstances, the purpose of a costs order has been said to be that of preventing the 'gross abuse' of the RL Act by frivolous, vexatious or misconceived proceedings." 21 In McGuirk v Commissioner of Police, NSW Police [2007] NSWADT 119 Judicial Member Higgins dealt with the issue in an application in the Tribunal's General Division. She summaries the principles governing costs in the following way: 10 The Tribunal has no inherent power to award costs, however it has been given such a power under section 88 of the Administrative Decisions Tribunal Act 1997 ('ADT Act'). It is a discretionary power that can only be exercised where the Tribunal is satisfied that there are 'special circumstances' warranting an award of costs. This means that in order to obtain a cost order an applicant has two hurdles to overcome. The first being able to identify 'special circumstances' and the second being able to show that the 'special circumstances' warrant an award of costs: see Gizah Pty Ltd v AXA Trustees Limited (No. 2) [2001] NSWADT 164 at [29]. 11 'Special circumstances' have been defined as 'circumstances that are out of the ordinary, but without having to be extraordinary or exceptional'. It is well established that mere success in a review application does not constitute special circumstances: see Brooks Maher v Cheung [2001] NSWADT 18 at [11] and Hutchings Electrical v Director General, Department of Fair Trading (No. 2) [2002] NSWADT 255 at [18]. In Brooks the Tribunal noted that while the circumstances which would or would not warrant an award of costs could not be exhaustively listed, an award of costs may be warranted '…where one party causes another party to incur costs because of unreasonable delays, or by making misconceived, frivolous, vexatious or insubstantial procedural or substantive applications'. 12 The power to order costs should not be used as 'some kind of sanction to punish agencies for poor administration', and the Tribunal should not embark on 'a general enquiry into the way in which the agency dealt with the Applicant': Raethel v Director-General, Department of Education & Training [2000] NSWADT 56 at [56] – [58]. 22 I can only exercise the discretionary power to award costs if I am satisfied that there are 'special circumstances' warranting an award of costs. In this matter Mr McGuirk has asserted that an award of costs is warranted. I do not agree. 23 I agree with the Ombudsman's submission that Mr McGuirk has not made out any special circumstances. I do not agree with Mr McGuirk's assertion that the Ombudsman's conduct in the handling of the applications represents 'special circumstances'. 24 I have considered the circumstances of the matter to determine whether there are circumstances that have not been referred to by either party, which could amount to 'special circumstances' for the purposes of section 88 of the ADT Act. I have not identified any such circumstances. Accordingly, it is my view that Mr McGuirk's application for costs should be dismissed. The Ombudsman has not sought an order for costs against Mr McGuirk. Accordingly I make no order for costs. 25 The issue of whether or not a report should be made under section 58 of the FOI Act is stood over until a decision is handed down in matter No. 073305. Order: Mr McGuirk's application for costs is dismissed. The issue of whether or not a report should be made under section 58 of the FOI Act is stood over until a decision is handed down in matter No. 073305. 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.