CITATION: Vassiliou & anor v Chief Commissioner of State Revenue [2009] NSWADT 7 DIVISION: Revenue Division APPLICANTS Anthony Vassiliou PARTIES: Despina Vassiliou RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 076064 HEARING DATES: On the papers SUBMISSIONS CLOSED: 19 December 2008 DATE OF DECISION: 14 January 2009 BEFORE: Handley R - Deputy President CATCHWORDS: Costs LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Land Tax Management Act 1956 Vassiliou and anor v Chief Commissioner of State Revenue [2008] NSWADT 15 Protogerous v Fouzas [2004] NSWADT 62 CASES CITED: Randi Wiks Pty Ltd v Pokana Pty Ltd [2003] NSWADTAP 27 Sarip Investments Pty Ltd v Uno Uno Pty Ltd [2004] NSWADT 27 EG (No 2) v Commissioner of Police, NSW [2004] NSWADT 226 B & L Linings & anor v Chief Commissioner of State Revenue [2008] NSWADTAP 14 APPLICANTS B Jones, barrister REPRESENTATION: RESPONDENT A Gerard, solicitor ORDERS: The application for costs is refused. REASONS FOR DECISION 1 Mr and Mrs Vassiliou ('the Applicants') applied to the Tribunal for a review of a decision of the Chief Commissioner of State Revenue ('the Respondent') made under the Land Tax Management Act 1956 disallowing Mr Vassiliou's objection to a notice assessing the Applicants as being liable for the payment of Land Tax on their land in Liguria Street, South Coogee because this was not their principal place of residence for the 2004 and 2005 Land Tax years. Prior to the hearing on 5 December 2007, the Applicants notified the Tribunal that they no longer contested the Respondent's decision in respect of the 2004 Land Tax year. 2 On 11 January 2008, my decision in this matter was published (Vassiliou and anor v Chief Commissioner of State Revenue [2008] NSWADT 15), with the following order: "That part of the decision under review concerning the Land Tax assessment for 2005 of land owned by the Applicants at Liguria Street, South Coogee is set aside and the Tribunal remits the matter to the Respondent for reconsideration with the direction that the Applicants' Liguria St, South Coogee land was their principal place of residence as at 31 December 2004." 3 On 8 May 2008, the Applicants' solicitors filed an application for costs and their submissions in support of this application. On 8 May 2008, the Tribunal Registry contacted the Respondent's solicitors by telephone, who stated that the Respondent would file submissions within 28 days of the Applicants' written submissions being served on them. The Applicants' solicitors' submissions were served on the Respondent's solicitors on 26 May 2008. On 16 September 2008, the Applicants' solicitors wrote to the Respondent's solicitors noting that no submissions had been received in response to their application for costs. In late November 2008, the Tribunal, noting that no further submissions had been filed, telephoned the Respondent's solicitors and set a final date for submissions of 19 December 2008, when their submissions were ultimately filed. Applicable Legislation 4 Section 88 of the Administrative Decisions Tribunal Act 1997 ('the ADT Act') states: 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. The Applicants' Submissions 5 The Applicants' solicitors referred to the decision in Protogerous v Fouzas [2004] NSWADT 62, where, at [50], Montgomery JM cited a summary of the applicable principles (set out by the Appeal Panel in Randi Wiks Pty Ltd v Pokana Pty Ltd [2003] NSWADTAP 27) in Sarip Investments Pty Ltd v Uno Uno Pty Ltd [2004] NSWADT 27, at [25], where Molloy JM noted: "(c) Arguments by an unsuccessful party that are put forward in good faith and have a reasonable basis do not of themselves entitle a successful party to an order for costs. It may well be different if the unsuccessful party had persisted with an unarguable case." 6 The Applicants' solicitors noted that the Applicants had given sworn evidence that the Coogee property was their principal place of residence, evidence that was corroborated by two independent witnesses. The Respondent led no evidence capable of contradicting this evidence, merely relying on the Applicants' addresses as recorded by the NSW Roads and Traffic Authority and the Electoral Commission. The Applicants' solicitors contended that such evidence could never, of itself, refute the Applicants' evidence of when they moved into the property, which was corroborated by independent witnesses. 7 The Applicants' solicitors submitted that in the light of the paucity of the Respondent's evidence and the overwhelming nature of the Applicants' evidence, "the Respondent ought to have, as a model litigant, accepted the Applicants' claim and allowed the objection". The Respondent's case "was so weak as to be unarguable". The Applicants' solicitors submitted that these facts constitute 'special circumstances' warranting the exercise of the Tribunal's discretion under section 88 of the ADT Act. The Respondent's Submissions 8 The Respondent noted that the Applicants abandoned their case in respect of the 2004 Land Tax year on 27 November 2007, eight days before the hearing. It is not clear what costs are being sought by the Applicants and in respect of what period. 9 The Respondent submitted that, pursuant to section 88 of the ADT Act, the Tribunal is only empowered to make an award of costs where, first, there are 'special circumstances', and second, such special circumstances warrant an award of costs. Whether a circumstance amounts to a special circumstance is a question of fact to be determined by reference to the relevant circumstances: EG (No 2) v Commissioner of Police, NSW [2004] NSWADT 226. The Respondent referred to the non-exhaustive list of examples of potential special circumstances in the Tribunal's Practice Note Number 12, referred to below. 10 The Respondent referred to the chronology of events in these proceedings, noting the Applicants' solicitors' failure to comply with directions for the filing and serving of evidence, late service of evidence and submissions, and late abandonment of their application in respect of the 2004 Land Tax year. As a result of this late abandonment, the Respondent was, in effect, successful in respect of the 2004 Land Tax year. 11 The Respondent submitted that there were no special circumstances and, certainly, none that would warrant exercise of the Tribunal's discretion under section 88. The Respondent did not maintain a position that had no tenable basis in fact or law and did not behave in a way that was out of the ordinary and grossly unreasonable. The Respondent was disadvantaged by the late service of the Applicants' corroborative evidence and was entitled to test that evidence. There was also the anomaly that there was no objective evidence in the nature of utility bills, or bank or mortgage statements to connect the Applicants with the Coogee property, while there was such evidence connecting them with their Surrey Hills property. The Respondent's submission at the hearing that the Tribunal should not be satisfied that the Coogee property was the Applicants' principal place of residence on 31 December 2004 was grounded in such evidence. Discussion 12 The Tribunal's normal expectation is that the parties in Tribunal proceedings should bear their own costs. The Tribunal does not follow the usual approach in adversarial proceedings whereby the successful party can expect an order for costs. The Tribunal's discretion to award costs pursuant to section 88 of the ADT Act may only be exercised where there are 'special circumstances'. In B & L Linings & anor v Chief Commissioner of State Revenue [2008] NSWADTAP 14, the Appeal Panel noted, at [55], that "no other Act or law" bears upon the Tribunal's power under section 88, and at [56]: "'Special circumstances' have been defined 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." 13 The Tribunal's Practice Note No 12 provides 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; in matters under the Retail Leases Act 1994 where a party lodges an unconscionable conduct claim instead of a retail tenancy claim and it is found that there was no basis for the unconscionable conduct claim; where an appeal is lodged and the Appeal Panel considers the appeal was without any real prospect of success." 14 The Respondent referred me to the chronology of events leading up to the hearing in this matter. I note that the Applicants' solicitors were three weeks late in filing their submissions on 18 October 2007 and were subsequently late in filing their evidence and submissions in reply. On 20 November 2007, I refused their application (made on 19 November 2007) for an adjournment of the hearing on 21 November 2007. However, on 21 November 2007, I adjourned the matter when it became clear that to continue with the hearing would deny the Applicants procedural fairness, the delays and lack of readiness for hearing having been caused by their solicitors and not the Applicants personally. I noted that the Applicants' solicitors' application for an adjournment two days before the scheduled hearing was very unsatisfactory and that I would entertain an application for costs by the Respondent in respect of costs thrown away as a result. I also directed that the Applicants' solicitors should file and serve any further evidence and submissions in reply by 26 November 2007. 15 On 27 November 2007, the Applicants' solicitors filed and served their further submissions together with an affidavit by Mrs Vassiliou. I note that in the further submissions, the Applicants' solicitors stated that "[t]he Applicants no longer press their application regarding the 2004 year". On 29 November 2007, they filed and served two further affidavits from additional witnesses. At the hearing on 5 December 2007, I refused the Respondent's application for an adjournment. 16 The Applicants' solicitor's unsatisfactory conduct in relation to the pre-hearing exchange of documents led to my adjourning the hearing, and, undoubtedly, made the Respondent's preparation for the hearing more difficult. It also had the potential to disadvantage the Respondent, although ultimately, as I stated in the reasons for my decision, I found the evidence of the Applicants' witnesses to be compelling. 17 I note that the Applicants abandoned their application in respect of the 2004 Land Tax year and, to that extent, the Respondent was, at least, partially successful in these proceedings. As the Respondent has pointed out, it is not clear what costs are being sought in this application for costs and in respect of what period. With regard to the 2005 Land Tax year, although the Respondent was unsuccessful, in the particular circumstances of this case I am satisfied that the Respondent acted reasonably and that, in the light of the evidence presented to the Tribunal, his submission to the Tribunal was tenable. 18 In conclusion, I am not satisfied that, in terms of the section 88 discretion, there are special circumstances in the sense of there being something unusual or out of the ordinary. Even if there were, I am not satisfied that in the particular circumstances of this case, where the Applicants' solicitors' conduct pre-hearing was less than satisfactory, that any such circumstances would warrant the exercise of the Tribunal's discretion to award costs. The Applicants' solicitors' application for costs is therefore refused. 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.