NSW Civil and Administrative Tribunal New South Wales Medium Neutral Citation: KGI [2015] NSWCATGD 17 Hearing dates: 30 March 2015 Date of orders: 30 March 2015 Decision date: 30 March 2015 Jurisdiction: Guardianship Division Before: B Shipp, Senior Member (Legal) M Matheson, Senior Member (Professional) M Spencer, General Member (Community) Decision: Costs application rejected Catchwords: COSTS – application for financial management withdrawn at hearing – whether special circumstances – obligation to consider general principles under Guardianship Act 1987 (NSW) – reasonable basis for substantive application Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Legal Profession Act 2004 (NSW) Guardianship Act 1987 (NSW) Cases Cited: OLL [2014] NSWCATGD 40 Bovaird v Guardianship Tribunal [2009] NSWSC 452 Snelgrove v Swindells [2007] NSWSC 868 Category: Costs Parties: Mr EHQ (costs applicant) Ms KMX (applicant at substantive hearing) Mr NBI (carer and spouse of Mrs KGI) Ms TMI (daughter of Mrs KGI) File Number(s): 58036 Publication restriction: Decisions of the Guardianship Division of the Civil and Administrative Tribunal have been anonymised to remove any information that may identify any person involved in the Tribunal's proceedings (s 65, Civil and Administrative Tribunal Act 2013 (NSW)) REASONS FOR DECISION 1. These Reasons for Decision are for the orders of the Tribunal made on 30 March 2015 concerning the costs application in respect of the proceedings regarding Mrs KGI. What the Tribunal decided 1. The Tribunal refused the application for costs. Background to application 1. On 6 February 2015, the Tribunal considered and dismissed an application by Ms KMX for the appointment of a guardian and a financial manager in relation to Mrs KGI. The application for the appointment of a financial manager was withdrawn, and accordingly dismissed pursuant to Section 55 of the Civil and Administrative Tribunal Act 2013 (NSW) ("the CAT Act"). 2. In the week before that hearing, Mrs KGI's son Mr EHQ had given notice of his intention to apply for indemnity costs under Section 60(2) of the CAT Act, and he lodged a submission in support on 4 February 2015. 3. At the end of the proceedings on 6 February 2015, the Tribunal adjourned the costs application and made Directions concerning further submissions. The Tribunal also directed that the costs application would be determined on the papers. 4. Following the hearing, the Tribunal received the Documents identified in the Annexure to these Reasons. 5. The Tribunal reconvened on 30 March 2015 to consider the application including the further material received after the substantive hearing. 6. The Tribunal decided to refuse the application for costs. These are the reasons for that decision. THE STATUTORY FRAMEWORK FOR DETERMINATION OF AN APPLICATION FOR COSTS 1. The power of this Tribunal to make costs orders is found in s 60 of the CAT Act, which includes, as a starting point, that each party must pay his or her own costs. Section 60 is in the following terms. 60 Costs 1. Each party to proceedings in the Tribunal is to pay the party's own costs. 2. 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. In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following: 1. whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, 2. whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, 3. 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, 4. the nature and complexity of the proceedings, 5. whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, 6. whether a party has refused or failed to comply with the duty imposed by section 36 (3), 7. any other matter that the Tribunal considers relevant. 1. If costs are to be awarded by the Tribunal, the Tribunal may: 1. determine by whom and to what extent costs are to be paid, and 2. order costs to be assessed on the basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 (NSW) or on any other basis. 1. In this section: 2. "costs" includes: 1. the costs of, or incidental to, proceedings in the Tribunal, and 2. the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal. 1. The objectives of the CAT Act and the guiding principle in s 36 are relevant considerations in determining an application for costs. 2. Amongst the objectives set out in s 3 are the following: 1. (c) to ensure that the Tribunal is accessible and responsive to the needs of all of its users, and 2. (d) to enable the Tribunal to resolve the real issues in proceedings justly, quickly, cheaply and with as little formality as possible, and 1. The guiding principle to be applied to practice and procedure is set out as follows by s 36 1. The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. 2. The Tribunal must seek to give effect to the guiding principle when it: 1. exercises any power given to it by this Act or the procedural rules, or 2. interprets any provision of this Act or the procedural rules. 1. Each of the following persons is under a duty to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal: 1. a party to proceedings in the Tribunal, 2. an Australian legal practitioner or other person who is representing a party in proceedings in the Tribunal. 1. In addition, the practice and procedure of the Tribunal should be implemented so as to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings. 2. However, nothing in this section requires or permits the Tribunal to exercise any functions that are conferred or imposed on it under enabling legislation in a manner that is inconsistent with the objects or principles for which that legislation provides in relation to the exercise of those functions. 1. Whilst the Guardianship Division of the Tribunal is bound by the provisions of the CAT Act, if it is exercising functions under the Guardianship Act 1987 (NSW) it must also have regard to the principles of that Act, set out in s 4, as follows: It is the duty of everyone exercising functions under this Act with respect to persons who have disabilities to observe the following principles: 1. the welfare and interests of such persons should be given paramount consideration, 2. the freedom of decision and freedom of action of such persons should be restricted as little as possible, 3. such persons should be encouraged, as far as possible, to live a normal life in the community, 4. the views of such persons in relation to the exercise of those functions should be taken into consideration, 5. the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised, 6. such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs, 7. such persons should be protected from neglect, abuse and exploitation, 8. the community should be encouraged to apply and promote these principles. 1. The question of costs in Guardianship Division proceedings was recently comprehensively considered in the decision of OLL [2014] NSWCATGD 40. That decision relevantly provides as follows: "43. The Guardianship Division of the Civil and Administrative Tribunal continues to exercise the same protective jurisdiction as the former Guardianship Tribunal and this is not inconsistent with it now being governed by the provisions of the CAT Act. For that reason and to the extent that the costs provisions of the CAT Act have some similarities with the now repealed provisions of the Guardianship Act (to begin with, the starting point for both is that each party should bear that party's costs), decisions made pursuant to the repealed provisions will continue to have some guidance to offer in the making of costs orders under the CAT Act provisions, particularly as they refer to underlying principles. 44. Despite the broad terms of s 69(1) of the Guardianship Act, (the costs provisions), costs orders in the Guardianship Tribunal under that statutory regime were rare. It was well recognised in a series of cases that the Tribunal's protective jurisdiction required that people should not be discouraged from bringing substantial and well-motivated applications to the Tribunal for fear of a costs order. It was determined that it would be inconsistent with the purpose of the Guardianship Act to make costs orders on a "winner loser" basis. 45. The Procedural Direction which applies to costs in the Guardianship Division includes a list of cases decided in the main under the previous legislation, as a guide to the principles and the approach to be applied in a protective jurisdiction. This includes two instances where the Supreme Court appears to have endorsed the approach of the (then) Guardianship Tribunal (Snelgrove v Swindells [2007] NSWSC 868, Bovaird v Guardianship Tribunal [2009] NSWSC 452). 46. Once an application is made, the Tribunal needs to deal with it in accordance with its statutory framework. The Tribunal is not bound by the rules of evidence and is required to conduct its hearings so as to give effect to the guiding principle of the CAT Act, which is set out above." 1. The Tribunal is satisfied that the above is a correct statement of law and principle to be applied to costs applications in the Guardianship Division of NCAT. THE SUBMISSIONS By the Costs Applicant 1. The costs applicant Mr EHQ made written submissions on 4 February 2015 and 20 March 2015 in support of his application for indemnity costs. The general tenor of his submissions is to the effect that he has been put to unnecessary expense purely as the result of the application by Ms KMX (and supported by the public hospital in which she works) which was never strong and was doomed to failure. 2. Mr EHQ claims reimbursement of the following specific costs: 1. The legal costs incurred in obtaining Enduring Guardianship on 8 December 2014 - $440 2. The legal costs incurred in having the solicitor responsible for preparing and arranging for execution of the Appointment of Enduring Guardian (AEG) and Enduring Power of Attorney (EPA) complete a Statutory Declaration in respect of his findings that Mrs KGI retained the capacity to execute these appointments on 8 December 2014 - $440 3. The costs of obtaining Mrs KGI's medical records from the public hospital - $103.70. 1. Mr EHQ suggests that he was put to these costs solely as a result of the unreasonable actions of the public hospital. In particular he suggests that his mother had been in hospital for nearly two months before the hospital revealed that it was questioning her capacity to make her own decisions about her care, and suggesting that the Public Guardian should be appointed. When the family became aware of this in late November 2014, "it became necessary for the family to protect its position by arranging for my mother to appoint my stepfather, my sister and me as her Enduring Guardians." 2. He suggests that it also later became necessary to arrange for the certifying solicitor to complete the Statutory Declaration because the hospital continued to contest Mrs KGI's capacity to make the AEG and EPA. Again Mr EHQ implies there was little basis for the hospital's view of Mrs KGI's incapacity. Finally, it was necessary to obtain (and pay for) Mrs KGI's hospital medical records as the application was largely unsupported by medical evidence, and there was concern that some medical records had been withheld. 3. Mr EHQ also claims that the application "is unfounded, unsupported by evidence, should not have been made and is bound to fail." He suggests there is no direct evidence of Mrs KGI's physical and cognitive condition and her need for 24-hour care. He suggests that the hospital should have acknowledged that Mrs KGI's condition had improved and sought to withdraw the application. There was also never any evidence in support of the financial management application. 4. With apparent reference to Section 60(3)(a) of the CAT Act, Mr EHQ claims that the hospital have "taken unfair advantage of or had insufficient regard to its position of power vis-à-vis the family and thereby hindered the family's opposition to the application." Mr EHQ's claims in this regard relate to the conduct of the proceedings, suggesting that the lack of reasoning supporting the medical opinions given by the hospital has hindered the family's opposition to the application by not putting them on notice of the case it needs to meet, and to identify what evidence it needed to obtain in response. This manner of conducting the proceedings has "caused the family undue stress and worry." 5. Mr EHQ also suggests that the above conduct by the applicant and the hospital amounts to a failure to comply with the duty imposed by Section 36(3) (and is therefore relevant under Section 60(3)(f) of the CAT Act). He suggests that the failure of the applicant and the hospital to properly state its case prevented the real issues from being dealt with justly, cheaply or quickly. He also suggests that the applicant and hospital file the application without trying to resolve the issues informally with the family, despite the family's offer to that effect. 6. In further submissions following the hearing on 6 February 2015, Mr EHQ makes the following points: * The only cognitive testing results available to the applicant did not support the applicant's contention that Mrs KGI lacked capacity to make lifestyle and financial decisions. * The hospital failed to properly update the Tribunal regarding Mrs KGI's physical improvement prior to and after making the application, relying instead on historical assessments. * The hospital had failed to undertake a more recent detailed assessment. * The above conduct indicates that the hospital "was concerned only with the success of the Application and not the best outcome for my mother." * The making of the application in this way led to "significant mental anguish on the part of my mother and the broader family," particularly the suggestion that Mrs KGI had no say in what happened to her. 1. The application was not made "in good faith" as the hospital suggests because it was unfounded for the reasons indicated above, or at the very least should have been withdrawn as Mrs KGI's condition continued to improve. 2. There is a strong public interest in deterring hospital staff from acting in this way. The risk of a hospital acting in this way deters members of the community from seeking emergency medical treatment Submissions in Response 1. No formal submission was made by on behalf of the original Applicant. Mr EHQ does however provide a letter dated 2 March 2015 from Ms Z, the General Manager of the public hospital. This letter is noted as being in response to his original costs submission. In summary, Ms Z states: * the medical team believed it to be appropriate to approach the Public Guardian (sic) to determine Mrs KGI's capacity * Mr EHQ was not unnecessarily disadvantaged. The public hospital did not require the family to obtain the AEG or EPA, and this was a decision they took independently. * There was no delay in finalising the proceedings. It took three months from the application being filed until the hearing. * The application was made in good faith to obtain the best outcome for Mrs KGI. The Tribunal treats this letter as the formal response to the costs application. THE QUESTION TO BE DECIDED BY THE TRIBUNAL 1. The Tribunal needs to decide whether there are special circumstances in this case that warrant a departure from the statutory starting point and usual practice of not awarding costs. In doing so, it must adhere to the statutory regime set up by s 60 of the CAT Act and have regard to the matters set out there. 2. The expression "special circumstances" should not be considered with reference to cases decided in other jurisdictions in cases involving different issues under different statutory regimes. The result of such an examination is likely to be to simply substitute other words for the phrase "special circumstances" which will not significantly advance consideration of the matter. 3. The broad term "special circumstances" denotes the necessity to exercise a discretion in the particular facts and circumstances of the case in which the decision is being made. There are consistent authorities to the effect that "special circumstances" are circumstances that are out of the ordinary, but do not have to be extraordinary or exceptional. Consideration must also be given to the jurisdiction in which this is being applied. As noted above the Guardianship Division of the Civil and Administrative Tribunal continues to exercise the same protective jurisdiction as the previous Guardianship Tribunal. 4. As noted in OLL [2014] NSWCATGD 40, "the interpretation of "special circumstances" in this jurisdiction must therefore occur in the context of, and having regard to, the principles of the Guardianship Act, to the extent that functions are being exercised under that Act. The principle set out in cases decided pursuant to the previous statutory regime under the Guardianship Act - i.e. that in a protective jurisdiction that people should not be discouraged from bringing substantial and well-motivated applications to the Tribunal for fear of a costs order, and that orders will not simply be made on a "winner loser" basis, will also provide guidance for the interpretation of "special circumstances" in this case. These principles are, in any event, implied to some extent in the costs regime of the CAT Act, and the objective of the CAT Act "to ensure that the Tribunal is accessible and responsive to the needs of all of its users." ARE THERE SPECIAL CIRCUMSTANCES WHICH JUSTIFY THE MAKING OF A COSTS ORDER? 1. The Tribunal considered carefully the circumstances in which this application was made, and the manner in which it was conducted. 2. There is no question that Mrs KGI was admitted to the public hospital in early October in great pain. There was some suspicion that she may have been suffering a cardiac arrest. While a cardiac event was eventually ruled out, Mrs KGI remained in great difficult-to-control pain for a number of weeks. 3. All of the above is indicated in the reports of the public hospital, and largely acknowledged by Mr EHQ in his written submissions to the Tribunal. 4. The Tribunal also accepts that it took a number of weeks to get Mrs KGI's pain levels under control, and there is evidence that Mrs KGI was at risk of dying for a period of time due to her overall physical condition and a failure to get proper nourishment. 5. In mid-November 2014, hospital staff apparently formed the view that Mrs KGI was no longer dying but was likely to need 24-hour care which could not be provided at home. 6. The opposition of Mrs KGI and her husband and children to this plan appears to have been the trigger for the application. 7. Mr EHQ claims that there was never any plausible or significant evidence of: 1. (d) his mother's incapacity to make her own decisions (certainly not by the time the application was made in late November/early December 2014). 2. (e) her need for 24-hour care. Mr EHQ claims that the absence of this evidence means that the application "is unfounded, unsupported by evidence, should not have been made and is bound to fail." For the purposes of the costs application, the Tribunal treats this claim as a claim that there was no "tenable basis in fact or law" for the application (Section 60(3)(c) of the CAT Act). 1. The Tribunal does not agree that there is no tenable basis in fact or law for the application for the appointment of a guardian. In relation to the question of Mrs KGI's decision-making capacity (whether she has a disability which prevents her from being able to make important life decisions), the Tribunal examined the evidence in its Reasons for Decision which followed the 6 February 2015 hearing. The Tribunal found that the evidence in favour of a finding of incapacity was "not strong" (bottom page 4). In the end the Tribunal found it was unable to make a positive finding, and this was not necessary in view of the finding that Mrs KGI had no need for the appointment of a guardian. This is very different from finding that there was no tenable basis for making this finding. Mr EHQ refers to the testing undertaken (MMSE and ACE) and suggests this could not have supported a finding of incapacity. However, it is well-known that these are screening tests, and not necessarily the only indicator of a person's lack of decision-making capacity. It was clear that Mrs KGI's general physical and cognitive state was in a state of flux during her time in hospital, and the fact that she had recovered significantly by the time of the hearing does not render the initial application "unfounded." 2. Nor does the Tribunal find there was no tenable basis for the suggestion that she required 24-hour care which could not be provided in her home. In the end, the Tribunal found that there was no need for the appointment of a guardian for the reasons set out at pages 6 and 7 of the previous Reasons. In summary, the Tribunal was satisfied that Mrs KGI's family had properly exercised their authority under the AEG to make arrangements for her care. Once again, this finding does not mean that the initial application lacked any merit. There is no dispute that Mrs KGI was in extremely poor health and had very high care needs during her admission. It did appear to the Tribunal that better communication between the treating team and members of Mrs KGI's family may have avoided the need for an application. This however is very different from a finding that the application was untenable. 3. Mr EHQ also claims that the Hospital had "taken unfair advantage of or had insufficient regard to its position of power vis-à-vis the family and thereby hindered the family's opposition to the application." This is based on similar claims regarding the lack of medical evidence to provide a proper basis for the application. There is no merit in this claim. The Tribunal did receive medical evidence in the form of reports of Dr Y and Dr X which lent some support to the application. This is not a matter where there was no basis for the opinions they gave. The Tribunal cannot find that the giving of these opinions, or the failure to obtain a separate or more comprehensive assessment amounts to conducting proceedings in a way that unnecessarily disadvantaged Mrs KGI or her family. The provision of evidence in this way is quite common in proceedings before the Guardianship Division. It is a matter for the Tribunal to weigh up the strength of this evidence and whether it is properly supported. 4. Mr EHQ also suggests that the applicant and the hospital have failed to comply with the duty imposed by Section 36(3) of the CAT Act (and is therefore relevant under Section 60(3)(f) of the CAT Act). He suggests that the failure of the applicant and the hospital to properly state its case prevented the real issues from being dealt with justly, cheaply or quickly, and that they did not try to resolve the issues informally with the family, despite the family's offer to that effect. The Tribunal does not agree with this submission. The evidence clearly indicates that at least one family meeting was held at the hospital with a view to discussing Mrs KGI's condition and considering her discharge options. When that did not lead to an agreed position, Ms KMX submitted the application to the Tribunal. Mr EHQ claims that he made further efforts to further discuss the issues with members of the hospital team, but he received no response. While it is perhaps preferable to try to resolve important issues regarding a person's care informally, there are various reasons why this may not be possible and it is in the person's best interests to bring the matter before the Tribunal at the earliest opportunity. The Tribunal does not regard the applicant as having conducted herself in a way that offended the guiding principle in Section 36(3) in bringing the application in the manner in which she did. 5. In the Tribunal's view, the circumstances in which the applicant prepared the matter for hearing and conducted herself at the hearing also do not amount to a failure to comply with the guiding principle under the CAT Act. 6. The Tribunal understands that Mrs KGI and her family received the documents relied on by the applicant in the normal way. The hearing took place approximately three months after the application was received, on the first day on which it was listed. There was nothing unusual in the way in which the application proceeded from submission to final determination. 7. The applicant withdrew the financial management application at the hearing without any evidence being heard. In some circumstances, the withdrawal of an application at the last moment can result in the award of costs. In matters in the Guardianship Division of NCAT, the one written application often contains requests for the appointment of both a guardian and a financial manager. If this is the case, consideration of both parts of the application is usually conducted at the same time. In this matter, the applicant withdrew the financial management part of the application towards the end of the hearing, having heard the detailed evidence of Mr EHQ and Mrs KGI's husband regarding the plans for her care. The applicant's request for the appointment of a financial manager independent of the family was closely related to her request for the appointment of an independent guardian. Having heard the detailed plans for her care (which had not been previously provided), the applicant apparently formed the view that there was no need to remove management of her finances from her family, and she withdrew the application. The Tribunal does not regard the withdrawal of the financial management application at this stage, albeit at the last moment, as being unreasonable, or indicative of there being no reasonable basis for this application, such that there might be costs implications. 8. Having made these findings, the Tribunal finds there are no special circumstances warranting a departure from the usual rule that each party pays their own costs. The Tribunal finds there was nothing out of the ordinary in the way in which the applicant brought or conducted these proceedings. 9. It was therefore not necessary to consider the question of whether the Tribunal can award the type of costs sought by Mr EHQ in these proceedings. The usual costs sought in these proceedings are legal costs or "party/party costs". There is no specific power in the CAT Act to award indemnity costs as claimed by Mr EHQ. Section 60(4)(b) appears to assume that the costs ordered will be costs rendered by a solicitor, but Section 60(5) might suggest a wider interpretation. Although Mr EHQ is a legal practitioner, he clearly indicated in his submissions that he was appearing in his personal capacity in these proceedings. This is an issue that would need to be determined in appropriate proceedings where the Tribunal finds "special circumstances" sufficient to justify a costs order. APPENDIX 1. The Tribunal considered the following documents in relation to the costs application: 1. Report of Dr Y, dated 28 November 2014. 2. Report of Dr X, Medical registrar of the public hospital, dated 27 November 2014. 3. Submission from Mr EHQ dated 30 January 2015. 4. Submission from Mr EHQ re costs dated 4 February 2015, and attachments. 5. Submission from Mr EHQ re costs dated 20 March 2015. 6. Letter from Mr EHQ to Ms Z dated 10 February 2015 7. Email exchange between Mr EHQ and Ms Z dated 10 February 2015 and 2 March 2015. 8. Enduring Power of Attorney dated 2 December 2014. 9. Appointment of Enduring Guardian dated 2 December 2014. 10. Aged Care Client Record from January 2015. 11. Orders and Reasons for Decision of the Tribunal from 6 February 2015. ********** 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: 28 July 2015