Administrative Decisions Tribunal New South Wales Medium Neutral Citation: B & L Linings Pty Ltd v Chief Commissioner of State Revenue (No 7) (RD) [2013] NSWADTAP 4 Hearing dates: On the papers Decision date: 21 January 2013 Jurisdiction: Appeal Panel - Internal Before: M Chesterman, Deputy President Decision: The application for costs filed by the Respondent on 7 August 2012 is dismissed Catchwords: Costs - whether it would be 'fair' to award costs under section 88(1A) of the Administrative Decisions Tribunal Act 1997 Legislation Cited: Administrative Decisions Tribunal Act 1997 Legal Profession Act 2004 Victorian Civil and Administrative Tribunal Act 1998 (Vic) Cases Cited: Adwell Holdings Pty Ltd v Ull Pty Ltd [2010] NSWADT 166 B & L Linings Pty Ltd v Chief Commissioner of State Revenue (No 5) (RD) [2010] NSWADTAP 21 B & L Linings Pty Ltd v Chief Commissioner of State Revenue (No 6) (RD) [2012] NSWADTAP 26 Baulderstone Hornibrook Engineering Co Pty Ltd v Gordon Runoff Ltd (No 2) [2009] NSWCA 12 Chief Commissioner of State Revenue v Kelly (No 3) [2011] NSWADTAP 12 Corrigan & Gibson v Watson [2009] NSWADT 110 Jonamill Pty Ltd v Alramon Pty Ltd (No 2) (RLD) [2010] NSWADTAP 3 Kelly v Chief Commissioner of State Revenue (No 2) [2010] NSWADT 210 Salon Today Pty Ltd v MMIR Pty Ltd [2009] NSWADT 71 Torchia v Swanton (RLD) [2012] NSWADTAP 5 Category: Costs Parties: B & L Linings Pty Ltd (First Appellant) L & B Linings Pty Ltd (Second Appellant) Chief Commissioner of State Revenue (Respondent) Representation: Costs I Latham (Respondent) Kemp Strang Lawyers (Appellants) Crown Solicitor (Respondent) File Number(s): 059044 Decision under appeal Citation: B & L Linings Pty Ltd and L & B Linings Pty Ltd v Chief Commissioner of State Revenue [2005] NSWADT 129 Date of Decision: 2005-06-10 00:00:00 Before: Revenue Division File Number(s): 046025 reasons for decision Introduction 1This is the seventh decision given by the Appeal Panel in these lengthy proceedings, in which the Appellant taxpayers, B & L Linings Pty Ltd and L & B Linings Pty Ltd, disputed the amounts of payroll tax over four years (2000 - 2003) that the Respondent, the Chief Commissioner of State Revenue, had assessed them to be liable to pay. 2For the purposes of this decision, the outline of facts given at paragraphs [2] to [21] of the sixth of these decisions, B & L Linings Pty Ltd v Chief Commissioner of State Revenue (No 6) (RD) [2012] NSWADTAP 26, provides a sufficient background. 3As indicated in this outline, the question to be decided in the sixth decision was the mode of assessment to be adopted in assessing a component of the costs that the Appeal Panel had ordered to be paid by the Respondent to the Appellants in its fifth decision (B & L Linings Pty Ltd v Chief Commissioner of State Revenue (No 5) (RD) [2010] NSWADTAP 21). That decision was delivered on 6 April 2010. 4The disputed item of costs within this order - hereafter 'the Costs Order' - was defined in the fifth decision as 'amounts in respect of... fees paid or payable by the Appellants to Byrons, Chartered Accountants, for work done by its employees as agents of the Appellants in these proceedings'. Subject to some specific exceptions, the proportion of the Appellants' costs (including the disputed item) that the Appeal Panel ordered to be paid by the Respondent was 75%. 5In the sixth decision, which the Appeal Panel delivered on 17 July 2012 following a hearing on 15 May 2012, it ordered (in Order 1) that the amount of the disputed item of costs should be 'assessed under Division 11 of Part 3.2 of the Legal Profession Act 2004 by a costs assessor appointed under that Division'. 6Order 2 in this decision comprised the following directions:- 2. (a) Within 21 days of the date of this decision, the Respondent is to file and serve its submissions on the costs incurred by it since the Appeal Panel's decision of 6 April 2010. (b) Within a further 21 days, the Appellants are to file and serve their submissions on this question. (c) If the Appellants' submissions incorporate any application for costs to be awarded in their favour, the Respondent will have a further 21 days within which to file and serve submissions in reply. (d) The matter will then be determined 'on the papers' under section 76 of the Administrative Decisions Tribunal Act 1997. (e) There will be general liberty to apply. 7At [120], the Appeal Panel observed that any application made pursuant to these directions will 'chiefly if not entirely relate to the costs associated with the hearing on 15 May 2012'. 8The Respondent applied for costs and filed supporting submissions on 7 August 2012; the Appellants filed submissions on 12 September 2012; and the Respondent filed submissions in response on 21 September 2012. The Respondent's submissions in chief were accompanied by an affidavit affirmed by Ms Holly Morgan, a solicitor employed in the office of the Crown Solicitor. 9The Respondent identified the costs that it sought in its application as (i) 'the costs of the hearing' and (ii) 'the costs of this application'. 10Because this application is for the costs of appeal proceedings, it may be determined by a Deputy President sitting alone, pursuant to section 24A(2)(a) of the Administrative Decisions Tribunal Act 1997 ('the ADT Act'), instead of by a three-member Appeal Panel. In contrast to the questions of costs put before the Appeal Panel at earlier hearings in these proceedings, the questions raised by this costs application are relatively straightforward and within a small compass. It is an appropriate case for constituting the Panel under section 24A(2)(a). The grounds of the Appeal Panel's sixth decision 11In order to reach its conclusion in its sixth decision (B & L Linings Pty Ltd v Chief Commissioner of State Revenue (No 6) (RD) [2012] NSWADTAP 26) that the disputed item of costs should be assessed under Division 11 of Part 3.2 of the Legal Profession Act 2004 ('the LP Act') by a costs assessor appointed under that Division, the Appeal Panel had first to consider whether the LP Act made provision for this to occur. The Panel had to determine whether this regime of assessment could be invoked when the amount payable under the relevant part of the Costs Order related to fees paid or payable for representation in the proceedings by an agent (in this case, an accountancy firm), not by a 'law practice' as defined in that Act. 12The Panel gave an affirmative answer to this question after a lengthy and detailed analysis (at paragraphs [39] to [101]) of a substantial quantity of legal material. This comprised (a) numerous provisions of the LP Act, (b) the section of the ADT Act (section 71) that authorises representation of a party by an agent who is not a legal practitioner and (c) several cases interpreting these provisions. The Panel pointed out (at [63]) that section 367A of the LP Act, on which its conclusion was chiefly based, had received very little attention in the case law. 13The Panel then decided, after a relatively brief discussion of the relevant issues (at [102 - 118]), that this approach to assessment was not only permissible, but also to be preferred. In so deciding, it rejected a number of alternative approaches that had been suggested by one or other of the parties and were available to it as a matter of discretion because of the concluding words of section 88(2)(b) of the ADT Act (this provision is quoted below). The following extracts from this part of the Panel's decision are relevant in the present context:- 111 First, Mr Thawley [counsel for the Appellants] submitted that the Tribunal should itself determine the disputed item of costs, with the rider that if the Tribunal thought fit, it could obtain evidence on one or more aspects of the assessment from an independent expert appointed by it... 112 Mr Latham [counsel for the Respondent] expressed opposition to this proposal, describing it as 'clumsy'... 113 While adhering to his primary argument that assessment of the disputed item of costs should be conducted by an assessor appointed under Division 11 of Part 3.2 of the LP Act 2004, Mr Latham observed that if instead the Tribunal chose to make its own determination, it could call 'an appropriate costs assessor' as a witness... 114 In reply, Mr Thawley suggested that the choice of an expert witness could be made by the Tribunal from lists of (for example) three candidates submitted by the parties... 117 The second of the two alternative approaches put before us was that the Tribunal should appoint an assessor, whose determination of the amount payable would be final and would take effect as an order of the Tribunal. Mr Thawley advocated this approach, emphasising that the assessor should have the expertise appropriate for determining a fair and reasonable amount for the costs charged by an accountancy firm, as opposed to a law practice. Mr Latham did not oppose this procedure, as a less desirable alternative to assessment by an assessor appointed under the LP Act 2004, but maintained his claim that the principles of assessment set out in this Act should be applied. 14The Appeal Panel's rejection of these alternative approaches was based on the following observation (at [118]):- In the light of our decision that the basis of assessment of the disputed item of costs should be the basis set out in section 367A of the LP Act 2004, and since this Act, in section 353(2), prescribes a mechanism for the Tribunal to refer this item for assessment, we see no advantage in departing from the standard procedure applying to these circumstances... Relevant principles regarding costs 15As indicated in earlier decisions of the Appeal Panel, the Tribunal's power to award costs in these proceedings is conferred by section 88 of the ADT Act. 16So far as is relevant to this application by the Respondent, section 88 states:- 88 Costs (1) Each party to proceedings before the Tribunal is to bear the party's own costs in the proceedings, except as provided by this section. (1A) 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 it is fair to do so having regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings by conduct such as: (i) failing to comply with an order or direction of the Tribunal without reasonable excuse, or... (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) any other matter that the Tribunal considers relevant. (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. 17The following passages in recent decisions on section 88(1A) by the Court of Appeal and the Tribunal are pertinent to the costs application now being considered. 18In the Appeal Panel's fifth decision in these proceedings, at [53 - 59], the Panel stated as follows:- 53 It is sufficient for present purposes to take account of two passages in recent Tribunal decisions relating to paragraph (c) of section 88(1A). Both of them refer directly or indirectly to decisions of VCAT [the Victorian Civil and Administrative Tribunal] relating to the corresponding paragraph in section 109 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic). 54 In Corrigan & Gibson v Watson [2009] NSWADT 110, a case cited by the Appellants, the Tribunal said at [29]:- When considering a costs application, the Tribunal may also have regard to the relative strengths of the claims made by each of the parties: ADT Act, s 88(1A)(c). The comparative strength of each party's case has been said by the VCAT to mean 'a substantial disparity between the strength of one claim and the weakness of its competitor': Beasley v Department of Education and Training [2006] VCAT 2044 at [20]. In these circumstances it may be fair to make an award of costs to the stronger side. However, having a weak case does not, of itself, justify an order for costs. A high level of weakness is required: Re Public Transport Corporation and Boroondara CC [2000] VCAT 472 at [32] (See Jason Pizer, Pizer's Annotated VCAT Act (2001) at p 250). 55 In Jonamill Pty Ltd v Alramon Pty Ltd (No 2) (RLD) [2010] NSWADTAP 3, an Appeal Panel decision published since the hearing on 4 December 2009, the Panel rejected, putting forward two reasons, a submission that paragraph (c) should only be considered applicable if the case brought by Jonamill Pty Ltd, the unsuccessful appellant case in the appeal, could properly be characterised as 'unarguable, unreasonable or untenable'. This submission was primarily based on a decision of VCAT (Winky Pop Pty Ltd v Hobsons Bay CC [2008] VCAT 1512). At [43], the Appeal Panel said:- The first reason is that to apply the subparagraph in this way is to ignore that part of its wording that refers to 'the relative strengths of the claims made by each of the parties'. The subparagraph refers to 'a claim that has no tenable basis in fact or law' only by way of exemplifying cases in which there is a very great disparity between these 'relative strengths'. 56 At [47], the Panel treated its opinion that there was a 'substantial disparity between the relative strengths of the parties' claims' as an important consideration in favour of its decision to make a costs order against Jonamill Pty Ltd. 57 The Appellants' arguments regarding paragraph (e) of section 88(1A) of the ADT Act commenced with the following description of the paragraph in the Tribunal's judgment in Salon Today Pty Ltd v MMIR Pty Ltd [2009] NSWADT 71 at [77]:- These are very, very wide words, quite deliberately chosen by the Parliament, which quite clearly enjoin this Tribunal to look very carefully at the concept/principle of fairness and to widen the scope, without restriction, of the various aspects of the litigation - indeed, all the aspects of the litigation - that may result in a finding that the Tribunal is satisfied that it is fair to award costs. 58 The Appellants went on to contend that the matters to which the Tribunal should have regard under paragraph (e) included the following: (i) whether the party against whom a costs order was sought had abided by the obligation of all litigants, referred to in Salon Today at [52], to 'carefully analyse the issues and the evidence at all times during the course of the proceedings' and reassess their position when evidence on a particular issue was overwhelming and (ii) the following statement of principle by the Court of Appeal in Baulderstone Hornibrook Engineering Co Pty Ltd v Gordon Runoff Ltd (No 2) [2009] NSWCA 12 at [18]:- Parties to litigation are expected to act reasonably in the running, and the resolution by compromise, of litigation. Stubbornness, intransigence and unrealistic and unreasonable expectations and demands can lead to unnecessary and unreasonable demands on scarce public resources... [P]arties are obliged to exhibit co-operation and openness in the conduct of litigation... 59 In his written submissions filed on behalf of the Commissioner, Mr Latham emphasised the breadth of the notion of 'fairness' in section 88(1A), the need to apply moral rather than legal principles in a commonsense fashion when determining 'fairness', and the dangers of endeavouring to formulate 'rigid guidelines'. These contentions were not opposed by Mr Thawley and appear to us to be correct. 19In a later case, AT v Commissioner of Police [2010] NSWCA 131, an applicant who had brought proceedings in the Tribunal under privacy legislation appealed successfully to the Court of Appeal against a decision of the Appeal Panel of this Tribunal that she had instituted these proceedings out of time. She sought an order under section 88(1A) that the respondent, the Commissioner of Police, should pay her costs of the first instance and appellate proceedings in the Tribunal. In ruling in her favour, Basten JA, delivering the judgment of the Court, said (at [32 - 34]):- 32 The appellant's submissions, identified at [20] above should be accepted: they strongly favour the individual appellant obtaining reimbursement for part at least of her legal expenses so far. The fact that the appellant has been successful at both levels of appeal is a matter which can be taken into account under sub-s (1A)(e). A further factor to be taken into account is that the respondent, being a State agency, was also required to act as a model litigant: Mahenthirarasa v State Rail Authority of NSW (No 2) [2008] NSWCA 201; 72 NSWLR 273 (Basten JA, Giles and Bell JJA agreeing). That is not to say that the Commissioner was not entitled to insist that statutory procedures be complied with. However, where the statutory scheme was entirely unclear, and the Commissioner's construction was not accepted, it is a factor which militates in favour of the Commissioner bearing the costs of the member of the public seeking to avail herself of a statutory right of review. 33 That approach does not diminish the force of the general principle that each party should bear its own costs in the Tribunal, a principle applicable at both first instance and before the Appeal Panel. Although an order varying the general rule may be made "only if" the relevant criterion is satisfied in a particular way, there is a relatively low hurdle for an applicant seeking an order. The criterion of "fairness" will take into account the compensatory purpose of an award of costs, which will generally favour the successful party. The circumstances in which fairness may be identified are indicated by the specific attributes listed in sub-s (1A), but subject to the generality of paragraph (e), read in its context. Other considerations will no doubt include the nature of the jurisdiction of the Tribunal which is invoked and the objects identified in s 3(b)-(g) of the Tribunal Act. 34 This Court having power to make orders which the Tribunal could have made under s 88, the appellant's submissions should be accepted and she should have her costs of both stages of the proceedings before the Tribunal, to be paid by the Commissioner. 20In a number of Tribunal decisions on section 88(1A) - see for example Adwell Holdings Pty Ltd v Ull Pty Ltd [2010] NSWADT 166 (a case in the Retail Leases Division) at [12 - 17] and [24 - 27] - evidence that the losing party has acted during the proceedings in a manner that delayed their completion has been treated as a factor under paragraph (b) justifying an award of costs. In Kelly v Chief Commissioner of State Revenue (No 2) [2010] NSWADT 210, however, it was held in the Revenue Division that the following conduct of the Chief Commissioner of State Revenue did not attract the operation of this paragraph:- 30 Under this factor, the Applicant complains that the Respondent: a. made submissions that disregarded the relevant authorities (relating to the broad nature of the discretion in question and that in the exercise of such a discretion, the facts of the particular case must be considered); b. made submissions regarding the role of the Tribunal and had disregarded the decision of Gzell J in Affinity Health Ltd v Chief Commissioner of State Revenue [2005] NSWSC 663; and c. made new oral submissions at the closing of the hearing that contradicted earlier written and oral submissions of the Respondent and which resulted in further written submissions having to be made after the hearing. 21On other grounds, arising under paragraphs (a)(i) and (c) of section 88(1A), the Tribunal in this case ordered the Commissioner to pay one half of the applicants' costs. That decision was affirmed on appeal (Chief Commissioner of State Revenue v Kelly (No 3) [2011] NSWADTAP 12). 22Finally, in Torchia v Swanton (RLD) [2012] NSWADTAP 5, which involved an appeal from a decision of the Retail Leases Division, the Appeal Panel said at [142]:- 142... It has been held on a number of occasions that the unreasonable rejection by an unsuccessful party of an offer of settlement that has proved more favourable to that party than the Tribunal's order(s) provides grounds for a costs order under subsection (1A) of section 88 of the ADT Act. Because there is no express mention of this situation in the subsection, it must be taken to fall within paragraph (e) ('any other matter that the Tribunal considers relevant'). The parties' submissions 23The submissions in chief filed by the Respondent were accompanied by an affidavit affirmed by Ms Holly Morgan, a solicitor employed in the office of the Crown Solicitor and having the carriage and conduct of this matter on behalf of the Respondent. In her affidavit, Ms Morgan indicated that the costs and disbursements incurred by the Respondent in relation to the hearing on 6 May 2012 amounted to about $13,500. 24Annexed to her affidavit were copies of three letters from the Crown Solicitor to Mr Cussen of Kemp Strang Lawyers, who acted for the Appellants. Each letter was marked 'Without prejudice save as to costs and/or costs of the costs assessment', or 'Without prejudice save as to costs of the costs assessment'. 25In the first of these letters, dated 17 January 2012, the Crown Solicitor stated that the Respondent's 'primary submission' as to the appropriate mode of assessment of the disputed item of costs was that it should be assessed under Division 11 of the LP Act. The letter went on to indicate that if this submission was not accepted by the Appeal Panel at the forthcoming hearing, the Respondent would argue for assessment by an 'independent costs assessor who is a lawyer'. It also set out some proposed orders that would give effect to this alternative mode of assessment, accompanied by a 'flowchart' of the steps involved. 26In the second letter, dated 31 January 2012, the Crown Solicitor referred to an indication, in a letter sent to him by Mr Cussen on 25 January, that the Appellants would be agreeable to assessment by an independent assessor possessing legal expertise. The Crown Solicitor asked whether the Appellants would agree to (a) the assessor being appointed under the Costs Assessor Scheme of the Supreme Court and (b) the parties giving up their rights of appeal and review relating to the assessor's determination. 27In the third letter, dated 20 February 2012, the Crown Solicitor enclosed proposed consent orders giving effect to this alternative mode of assessment (by an independent assessor) and requesting a reply by 22 February. 28In its submissions in chief, the Respondent maintained that, as this correspondence demonstrated, it had 'repeatedly sought to settle this proceeding on a basis similar to that finally determined by the Appeal Panel' and that the Appeal Panel's conclusion 'was consistent with each offer to settle by the Respondent'. It submitted that the Appellants' rejections of these offers were therefore relevant in two different ways to its application for costs under section 88(1A) of the ADT Act. 29First, the Respondent maintained, these rejections had 'forced' it to 'incur further costs and delay' and had thereby 'unreasonably prolonged the time taken to complete the proceedings', within the meaning of paragraph (b) of section 88(1A). 30Secondly, it argued that these rejections of offers were 'relevant matters' under (implicitly) paragraph (e) of section 88(1A) and that, because these were proceedings 'with a commercial flavour', it gave grounds for an order that the Appellants pay the Respondent's costs since the first of the offers was made. 31The third and last ground on which the Respondent sought costs was not based on this correspondence. It was that the Appellant had persisted with arguments that were 'weak relative to those of the Respondent' and that there was a 'sufficient disparity between the relative strengths of the two parties' cases to justify a costs order based on s 88(1A)(c)'. 32The Appellants argued that none of these three grounds should be upheld, since none of them provided a basis for the exercise of the Appeal Panel's discretion to avoid costs. In response to the second ground, they alleged, without furnishing particulars, that they themselves had 'put proposals to compromise the costs payable by the Respondent, which have not been accepted'. In response to the third ground, they maintained that 'the position advanced by the Respondent was not so strong as to justify' a costs order. 33The Appellants advanced three further arguments stemming from the course that these proceedings have taken in recent months. 34First, they argued that the Appeal Panel's decision on the Respondent's application for costs should await the outcome of the costs assessment ordered in its sixth decision. The reason given was that the total of the amount that the Respondent currently owed to them on account of costs and the amount that it would be required by this assessment to pay to them was 'substantial'. 35Secondly, the Appellants claimed that the Respondent had caused delay in the progress of these proceedings. It had done so in the following ways: (a) as mentioned in the Appeal Panel's sixth decision at [24], it had formally submitted that the Panel erred in holding that costs awarded under section 88 of the ADT Act could include costs payable to an agent who was not an Australian legal practitioner; (b) it had effected service of an affidavit shortly before a hearing initially scheduled for 27 January 2012, causing that hearing to be vacated; and (c) it had served 'Further Submissions' only five days before the hearing on 15 May 2012 (this being a matter on which the Appeal Panel commented in its sixth decision at [33 - 34]). 36Thirdly, the Appellants argued that their costs of the assessment process ordered in the sixth decision of the Appeal Panel (given on 17 July 2012) fell within the scope of the Costs Order made in its fifth decision (given on 6 April 2010) and should therefore be paid to them by the Respondent. 37In its submissions in response, the Respondent submitted that the Appellants' claim to have made offers of settlement should be ignored because no particulars of this claim had been provided. 38The Respondent argued also that the adjournment of its costs application sought by the Appellants was unwarranted and would serve no useful purpose, and should therefore not be granted. As to the claim that it had caused the proceedings to be delayed, it argued that (a) its formal reservation of its position regarding the scope of section 88 had had no impact on the progress of the proceedings, (b) the hearing on 27 January 2012 occurred in response to a letter to the Tribunal from the Appellants' solicitor and (c) the 'Further Submissions' were in fact served within the time specified by directions of the Appeal Panel. Discussion and conclusions 39The Appeal Panel's conclusion is that the Respondent has not demonstrated that it would be 'fair' under section 88(1A) of the ADT Act to make a costs order in its favour. Its application for its costs of (i) the hearing on 15 May 2012 and (ii) the application itself should therefore be dismissed. 40The Panel's reasons for rejecting the Respondent's application stem chiefly from the considerations that, as stated above at [12], the question of law addressed at the hearing on 15 May 2012 and determined in the Panel's subsequent decision called for a 'lengthy and detailed analysis... of a substantial quantity of legal material' and that the section of the LP Act (section 367A) on which the decision was chiefly based 'had received very little attention in the case law'. This question was indeed a novel one and the task of resolving it was not straightforward. 41In addition, as outlined above at [13], a further question determined by the Panel involved the exercise of its discretion, conferred by section 88(2)(b) of the ADT Act, as to the basis on which any costs ordered to be paid should be assessed. 42For these reasons, it cannot be said that the Appellants' case on the matter at issue was 'weak' or that there was a 'substantial disparity' between the relative strengths of the parties' cases, so as to attract the operation of section 88(1A)(c) of the ADT Act. While the Panel was ultimately satisfied of the correctness of the reasoning that it adopted in resolving the question of law confronting it, the answer to that question had not been determined by previous decisions and was by no means obvious. Moreover, the Panel could still have decided, in the exercise of its discretion under section 88(2)(b), to prescribe a method of assessment of the disputed item of costs other than that indicated by the conclusion it had reached on the prior question of law. 43This ruling that the Appellants' position was not 'weak' and that there was no 'substantial disparity' between the relative strengths of the parties' cases is enough to dispose of the Respondent's claim for costs based on paragraph (b) of section 88(1A). Even if the Appellants' conduct in rejecting the Respondent's offers and seeking to have the mode of assessment resolved by a further decision of the Appeal Panel had the effect of 'prolonging' the time taken to complete the proceedings, this 'prolonging' was not 'unreasonable'. 44This same ruling is also enough to dispose of the Respondent's claim based on paragraph (e). This claim relies on a number of Tribunal decisions whereby costs orders have been based on the fact that prior offers of settlement made by the successful party were rejected. But it has always been a requisite that the rejection was 'unreasonable'. That was not the case here. 45It is relevant here to draw attention to two further matters. First, settlement of the disputed issue on the basis ultimately determined by the Tribunal was only one of a number of bases of settlement proposed by the Respondent and was proposed only once, in a relatively brief passage in the first of the letters of offer. Secondly, it was only in its 'Further Submissions' relating to the hearing on 15 May 2012 that the Respondent drew attention to the section of the LP Act (section 367A) on which its arguments relating to the important question of law were founded. As the Appellants pointed out (see [35] above), these submissions were filed and served only five days before the hearing. Had the Respondent disclosed its line of argument on this question at a significantly earlier stage, there might have been grounds for arguing (it can be put no higher than this) that the Appellants acted unreasonably in rejecting the offer of settlement contained in the first letter. 46There is no merit in the Appellants' claim that the Appeal Panel's decision on the Respondent's application for costs should await the outcome of the costs assessment ordered in its sixth decision, or that the Respondent caused delay in the progress of these proceedings (other than by failing to disclose an ultimately successful line of argument until shortly before the hearing on 15 May 2012). 47The Respondent made no submission in response to the Appellants' claim that their costs of the assessment process ordered in the sixth decision of the Appeal Panel fell within the scope of the earlier Costs Order and should therefore be paid to them by the Respondent. Its application for the costs of the hearing on 15 May 2012 did not contradict this claim by the Appellants. 48It is appropriate for the Appeal Panel to state here (though without making any formal order) that this claim by the Appellants is well founded as a matter of general principle. Unless otherwise indicated, the costs of determining, through a process of assessment, any amount ordered to be paid under a costs order will fall within the scope of that order. But the Costs Order in these proceedings, made on 6 April 2010 in the Panel's fifth decision, was to the effect that, subject to limited exceptions, the Appellants should receive only 75% of the assessed costs incurred by them. They are therefore entitled to only 75% of their costs of the assessment process. 49For the foregoing reasons, the application for costs filed by the Respondent on 7 August 2012 is dismissed. In view of this decision, there is no need to consider here the implications of references in the parties' submissions to the fact that the second Appellant, L & B Linings Pty Ltd, is in liquidation. ********** 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: 21 January 2013