CITATION: Borsak v Cheung (No 2) [2006] NSWADT 208 DIVISION: General Division APPLICANT PARTIES: Cheryl Anne Borsak RESPONDENT Kwai Lin (Karin) Cheung FILE NUMBER: 043210 HEARING DATES: On the papers SUBMISSIONS CLOSED: 02/24/2006 DATE OF DECISION: 07/07/2006 BEFORE: O'Connor K - DCJ (President); Rice S - Judicial Member; Bolt M - Non Judicial Member CATCHWORDS: Costs MATTER FOR DECISION: Costs Administrative Decisions Tribunal Act 1997 LEGISLATION CITED : Legal Profession Act 2004 Local Government Act 1993 CASES CITED: Borsak v Cheung [2006] NSWADT 5 La France v Clarence [2004] NSWADT 256 S Docker of counsel instructed by S Moran, solicitor, Public Interest Advocacy Centre REPRESENTATION: A J O'Brien of counsel instructed by Pigott Stinson Ratner Thom, solicitors ORDERS: 1. That the respondent pay the applicant's costs of the proceedings; 2. Failing agreement between the parties as to those costs within 60 days, costs to be assessed by a costs assessor on a basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004. REASONS FOR DECISION 1 By decision delivered in January 2006, the Tribunal upheld the applicant's application made under s 329 of the Local Government Act 1993 (LGA). It ordered that the respondent be dismissed from the civic office of Councillor, Municipality of Ashfield: see Borsak v Cheung [2006] NSWADT 5. The applicant has applied for her costs of the proceedings on a party-party basis. 2 Sub-section (6) of s 329 of the LGA provides: '(6) The Tribunal may award costs under section 88 of the Administrative Decisions Tribunal Act 1997 [the Tribunal Act] in respect of proceedings commenced by an application made under this Part.' 3 Section 88 of the Tribunal Act 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. (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 a basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis. (3) However, the Tribunal may not award costs in relation to proceedings for an original decision unless the enactment under which the Tribunal has jurisdiction to make the decision provides for the awarding of costs. (4) In this section, costs includes: (a) costs of or incidental to proceedings in the Tribunal, and (b) the costs of or incidental to the proceedings giving rise to the application, as well as the costs of or incidental to the application.' 4 These proceedings were brought by a ratepayer living in the Municipality. The burden of her case was that the respondent was not qualified to stand for public office in the Municipality because she lived outside the Municipality, and that the address that she gave as her address within the ward when she stood for office was merely an address of convenience that did not correspond with her true residential address. The Tribunal found that the applicant had established her case against the respondent. 5 This is a class of proceeding of the highest importance for the effective functioning of democratically elected institutions. It provides the means through which members of the community can contest the legitimacy of an election result. The Tribunal, in effect, sits in these cases as the court of disputed returns for local government elections. The proceedings contribute to the maintenance of the integrity of election processes and the maintenance of public confidence in democratic institutions. The LGA leaves it to private individuals to invigilate the election process. There is no independent public oversight or enforcement mechanism. 6 In this case the applicant pursued proceedings over a considerable period of time, filing her application in June 2004, and they took 18 months to resolve. There were several days of hearing, and several other interlocutory proceedings. The applicant was represented by counsel, instructed by a solicitor from the Public Interest Advocacy Centre. 7 There is a risk, of course, that proceedings of this kind may be brought malevolently or as merely the continuation of a political battle lost by the applicant to the respondent at the ballot box. There is a danger that proceedings of this kind will be used oppressively by an applicant in that way. Respondents may well be exposed to the risk of substantial costs in defending the proceedings (and their seat), as may be any person or organisation who indemnifies them in respect of those costs. 8 In La France v Clarence [2004] NSWADT 256, the Tribunal observed at [61]-[62]: '61 In exercising the discretion as to costs, we also think that some greater flexibility must be shown in this category of case in responding to costs applications, as compared to the usual cases heard in the General Division (applications for review of administrative decisions made by State government agencies). Section 329 applications are of a unique kind. While clearly there is an important public interest in ensuring the integrity and regularity of elections, on the other hand a person apparently regularly elected may be put to substantial personal expense in money and time in defending an application. If the application is one that has no foundation, and at no point reached the level of being reasonably arguable, then this is a strong factor favouring the making of a costs award. That was the case here. 62 In this regard it is well known that members of Councils do not receive significant payments for their services (as it happens the present respondent is also the Mayor and may, therefore, have access to a better allowance than the ordinary Councillor). Members of Councils are forced to draw on their own financial resources to meet applications of this kind, unless those that endorsed them are prepared to reimburse the cost. They may not have the marginal benefit that commercial respondents enjoy of being able to claim legal costs as a business expenditure. In these circumstances, they should not be put at the risk of an application that is not even arguable.' 9 In that case a costs order was made against the applicant. The Tribunal was satisfied that she had pursued a case without any proper foundation, and had continued to do so after being given an opportunity to desist by the respondent through his solicitors. 10 Sub-section (1) of s 88 restricts the awarding of costs to cases where the Tribunal is satisfied that there are 'special circumstances' warranting an award. It is not enough merely that an applicant has won their case. Something more must be present. 11 The applicant submits that the following circumstances should be taken into account in favour of an award: (a) she is seeking no personal benefit from the matter (b) the respondent's conduct of the matter created avoidable costs (c) the matter raises important public interest considerations (d) the matter determines an important question of law. 12 We agree with the applicant's submission that the respondent's conduct of the matter led to avoidable costs. The Tribunal found that the respondent invented the suggestion that she and her husband had not lived together (at [101]), which resulted in unnecessary time being taken in the hearing. Further, unnecessary hearing time was spent with witnesses for the respondent whose evidence was 'for the most part unsatisfactory' (at [107]), and 'contrived and exaggerated' (at [114]). We acknowledge, on the other hand, that one element of the proceedings was necessitated by concerns that the Tribunal had over the proper interpretation of the relevant law. As to this, the applicant says that had the respondent admitted the true facts at an early stage of the proceedings, the proceedings would have focused only on a question of law, which could have been dealt with at a single day's hearing. 13 The applicant also noted that the respondent had been on notice for some time that there was concern held by some people in the electorate over her residential status. A similar application had been filed after the 2001 election, but could not be pursued because it was filed out of time (by two days), with the result that the Tribunal was held by the Supreme Court to be without jurisdiction. 14 The respondent noted that the applicant is a member of the No Politics Party. The applicant was an unsuccessful candidate at the 2004 election, securing a handful of votes. The respondent referred to the uncertainty in the state of the law that surrounds the nature of the residence requirement. She noted that when the proceedings before the Tribunal after the 2001 election were unable to be pursued, one of the members of the No Politics Party (a Ms Davidson) lodged a complaint with the Australian Electoral Commission over the respondent's right to remain on the roll. The Commission decided, based on its investigation, that she was entitled to remain on the roll (letter 12 February 2004, from Australian Electoral Commission attached to the respondent's submissions). There was also a complaint to the Independent Commission Against Corruption. That Commission declined to investigate the matter. 15 The respondent questioned the applicant's assertion that she stood to gain no personal benefit from bringing the action. She noted that the applicant continued to be active in local politics, and referred to an article in the Inner West Weekly, 12 January 2006 (an interview with the applicant relating to the outcome of the case, front page main story). In the issue of 16 February 2006, the applicant referred to her candidacy as an independent for the by-election created by the respondent's removal from office. 16 In our view, it is to be expected that challenges to election outcomes based on an irregularity in their conduct will be made by people who have been actively involved in the election campaign, as candidates or organisers. The history of litigation before courts of disputed returns in Australia demonstrates that. There is a danger that such challenges will be launched mischievously and without foundation. As the decision in La France v Clarence demonstrates, the Tribunal sees it to be appropriate to protect elected candidates by way of a costs order from 'strike suits' of that kind. But this case does not fall into that category. 17 In support of the costs application, the applicant also notes that s 329 does not permit the award of damages, so she has no other source of financial compensation than a costs order. It is not desirable, we think, to approach the question of the award of costs from such a perspective. Public law proceedings – of which the present application is a species – do not ordinarily have a damages aspect to them. We would not wish to endorse the proposition that some greater liberality should be shown in awarding costs to successful parties in those classes of proceedings where a damages award is not one of the remedies available. 18 On the other hand, we have acknowledged that the bringing of proceedings with a public interest dimension can constitute a special circumstance for the purpose of exercising the costs discretion. 19 The respondent's submissions annex the terms of the retainer between the applicant and her solicitors. We accept that they make it clear that the applicant's liability for any costs is only to the extent of any costs order made in her favour. The respondent criticised, in effect, this situation where the applicant was protected, to a degree, from the full impact of costs if she failed. Such a retainer does not, of course, immunise a client from responsibility to meet any costs order made in favour of the other party. 20 The respondent referred to the applicant's solicitors as a 'publicly funded' organisation, thereby, it seems, questioning the justification for making any costs order against the respondent. By letter in reply to these submissions, the applicant's solicitor advised that while the Centre is publicly funded it is expected to generate income, which it does in part 'through the recovery of legal costs in matters where its clients obtain an order for costs'. 21 In our view the respondent's submission is not one that should be permitted to bear on the exercise of our discretion. It is not uncommon for people to be represented by solicitors who practise in the community legal sector or at bodies such as the Legal Aid Commission. It is well known that legal services of this kind have costs agreements with their clients. Their clients should not be put at risk of not receiving a costs award in an appropriate case simply because they have sought assistance from a legal service that is not a private law firm. The receipt of income from costs awards diminishes the public cost of having these forms of legal aid. 22 We agree with the respondent's submission that no great weight should be given to the applicant's submission that a special circumstance may be that a case has led to the consideration and resolution of an important question of law. Were we to endorse such a proposition, that might encourage the bringing of cases in the Tribunal simply because they involved an interesting legal question, where the actual dispute between the parties was insubstantial. Tribunals, like courts, are meant, as we see it, to be forums for the practical resolution of disputes of moment between parties. 23 The present case is, we think, very much the obverse of the situation in La France v Clarence. 24 Here the applicant has been vindicated by the outcome. The applicant's case on the facts was a strong one. The respondent's case on the facts was a weak one. The proceedings were long and drawn out, a situation to which the respondent's conduct of her case contributed. While the Tribunal's concerns over the question of law issue contributed to a degree to that situation, the time in the case was mainly consumed by preliminary procedural issues and the hearing of evidence. 25 Having regard to the various factors we have mentioned – in particular the nature of the jurisdiction, the importance to the public interest of the private enforcement mechanism it establishes, the strength of the applicant's case and the weakness of the respondent's case – it is, we consider, appropriate for the respondent to pay the applicant's costs on a party-party basis. Order 1. That the respondent pay the applicant's costs of the proceedings. 2. Failing agreement between the parties as to those costs within 60 days, costs to be assessed by a costs assessor on a basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004. 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