NSW Civil and Administrative Tribunal New South Wales Medium Neutral Citation: OKK [2015] NSWCATGD 42 Hearing dates: 21 October 2015 Date of orders: 21 October 2015 Decision date: 21 October 2015 Jurisdiction: Guardianship Division Before: B Shipp, Senior Member (Legal) J Wortley, Senior Member (Professional) A Wannan, General Member (Community) Decision: The Tribunal refused the application for costs. Catchwords: COSTS – application to review enduring power of attorney by manager of aged care facility – application to withdraw prior to hearing – consent by parties and Tribunal – application dismissed – application for costs by attorneys – whether special circumstances – proceedings reasonably commenced – standing to bring application – proceedings not frivolous or vexatious – no special circumstances – application dismissed Legislation Cited: Aged Care Act 1997 (Cth) Civil and Administrative Tribunal Act 2013 (NSW), ss 3, 36, 38(5), 60(3) Guardianship Act 1987 (NSW), s 4 Powers of Attorney Act 2003 (NSW), ss 26(1), 35(1)(d), 35(4) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Brooks Maher v Cheung (2001) NSWADT 18 Dey v Victorian Railways Commissioners (1949) 78 CLR 62 General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 Hatchett v Bowater Tuff Industries Pty Ltd (No 2) (1991) 28 FCR 324 Hopkins v Governor General of Australia [2013] NSWSC 1068 JF Keir Pty Ltd v Sparks [2008] FCA 611 Kondos v Citadin Pty Ltd (LSD) [2003] NSWADATP7 Lai Quin (1997) 186 CLR 622 OLL (2014) NSWCATGD 40 TPJ [2015] NSWCATGD 15 Whiteoak v State of NSW [2014] NSWCATAD 45 Category: Costs Parties: Mrs OKK (subject person) Representation: Legal Representatives: Ms Karen Jones, Barrister (for Ms NLE) Ms Emma McFarlane (for Ms NLE) Ms Alexandra Rose, Barrister (for the attorneys) Mr George Elias (for the attorneys) File Number(s): 58998 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 What the Tribunal decided 1. The Tribunal refused the application for costs. Background 1. Mrs OKK is a 93-year old woman who has lived at an aged care facility in South West Sydney ("the aged care facility") since October 2014. She has one daughter Ms KAN who is married to Mr LQO. 2. On August 2012, Mrs OKK made an Enduring Power of Attorney appointing Ms KAN and Mr LQO as her attorneys, jointly and severally ("the EPA"). Her granddaughters Ms UMT and Ms OVN were appointed as the substitute attorneys. Ms KAN and Mr LQO are jointly referred to in these Reasons as "the attorneys". 3. Ms NLE is the Business Support Manager at the aged care facility. In March 2015, she made application to review the EPA. She suggested that the attorneys had failed to act in Mrs OKK's best interests in a number of respects. 4. Leave was granted for Ms Karen Jones, Barrister, to represent Ms NLE in all proceedings pending before the Tribunal. 5. The matter was listed for hearing on 29 July 2015. Just prior to that date, there were some important developments: 1. The attorneys also sought to be legally represented; 2. The applicant Ms NLE indicated she intended to withdraw the application; 3. The attorneys indicated they consented to the withdrawal of the application but sought their costs associated with the proceedings. 1. On 29 July, the Tribunal granted leave for the attorneys to be legally represented. Ms Alexandra Rose, Barrister, appeared instructed by Elias Gates Solicitors. The Tribunal also considered the request to withdraw. The Tribunal gave leave for the application to be withdrawn, and the application was accordingly dismissed. 2. The Tribunal adjourned the question of costs for a period of one month to a date to be fixed by the Registrar, and gave directions regarding the filing of further submissions by the Costs Applicant and the Costs Respondent. The Tribunal also indicated it intended to deal with the costs matter on the papers unless the costs applicant requested a formal hearing by a certain date. No such request was received. 3. The Tribunal received the following further documents: 1. Attorney's submission as to costs prepared by Ms Rose dated 3 August 2015; 2. Ms NLE's submissions as to costs prepared by Ms Karen Jones dated 12 August 2015; 3. Further correspondence from Ms Emma McFarlane, solicitor for Ms NLE dated 9 September 2015. 1. As a result of the matters raised in the letter from Ms McFarlane, and despite the parties' willingness to have the matter determined on the papers, the Tribunal did make contact with the legal representatives for both the original applicant and the attorneys when it further considered the matter on 16 September 2015. On that occasion, further submissions were received from Ms Karen Jones on behalf of the applicant, and Mr George Elias on behalf of the attorneys. 2. Due to the time taken to conduct this further hearing, the Tribunal was unable to finalise its consideration of the matter on that occasion. The matter was further considered by the Tribunal panel on 21 October 2015. The Tribunal determined on that day to refuse the attorney's 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 section 60 of the Civil and Administrative Tribunal Act 2013 (NSW) ("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: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (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) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3), (g) any other matter that the Tribunal considers relevant. (4) If costs are to be awarded by the Tribunal, 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 the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014 ) or on any other basis. (5) In this section: "costs" includes: (a) the costs of, or incidental to, proceedings in the Tribunal, and (b) 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 section 36 are relevant considerations in determining an application for costs. Amongst the objectives set out in section 3 are the following: (c) to ensure that the Tribunal is accessible and responsive to the needs of all of its users, and (d) to enable the Tribunal to resolve the real issues in proceedings justly, quickly, cheaply and with as little formality as possible 1. The guiding principle to be applied to practice and procedure is set out in section 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: (a) exercises any power given to it by this Act or the procedural rules, or (b) interprets any provision of this Act or the procedural rules. (3) 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: (a) a party to proceedings in the Tribunal, (b) an Australian legal practitioner or other person who is representing a party in proceedings in the Tribunal. (4) 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. (5) 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 Section 4, as follows: 4 General principles It is the duty of everyone exercising functions under this Act with respect to persons who have disabilities to observe the following principles: (a) the welfare and interests of such persons should be given paramount consideration, (b) the freedom of decision and freedom of action of such persons should be restricted as little as possible, (c) such persons should be encouraged, as far as possible, to live a normal life in the community, (d) the views of such persons in relation to the exercise of those functions should be taken into consideration, (e) the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised, (f) such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs, (g) such persons should be protected from neglect, abuse and exploitation, (h) 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 previous 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 meet that party's costs), decisions made pursuant to the repealed provisions will 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 this is a correct statement of law and principle to be applied in costs application in the Guardianship Division of NCAT. THE SUBMISSIONS 1. Ms Rose on behalf of the attorneys made her initial submissions in support of the costs application at the hearing on 29 July 2015 when the Tribunal gave leave for the application to be withdrawn. At pages 7 and 8 of the Reasons for Decision which followed that hearing, the Tribunal summarises those submissions and the submissions in reply on behalf of the applicant. 2. Both legal representatives enlarged upon these submissions in their subsequent written submissions. 3. The attorneys seek the following costs: 1. $20,526 (on an indemnity basis) comprising legal fees reasonably incurred from 25 March 2015 to 29 July 2015 in preparation for the substantive hearing; 2. $3,080 for the legal costs reasonably incurred in preparation of the costs application and further attendances on the attorneys, plus; 3. $1,870 if the costs application were to proceed to an oral hearing. 1. The attorneys make submissions in relation to each of the matters to which the Tribunal may have regard under section 60(3) of the CAT Act. They suggest that the combined effect of these matters amounts to special circumstances under section 60(3) sufficient to persuade the Tribunal to exercise its discretion to award costs. 2. In general terms, the applicant claims there are no special circumstances warranting the exercise of the Tribunal's discretion to make a costs order. This is because she had a proper interest in the proceedings, she had proper grounds for bringing the application, she has not unreasonably prolonged the proceedings by failing to withdraw at the earliest opportunity and she has not disadvantaged another party in her conduct of the proceedings. 3. The following section sets out the attorneys' arguments and the applicant's response, categorised by the separate elements of section 60(3), together with the findings of the Tribunal on each point. The Application had no tenable basis in fact or law ("no prospects of success"). The applicant lacked standing. 1. The attorneys claim that the applicant had no standing to bring the proceedings under section 26(1) and section 35(1)(d) of the Powers of Attorney Act 2003 (NSW) because she did not have "a proper interest in the proceedings or a genuine concern for the welfare of [Mrs OKK]". The attorneys argue that if the applicant did not have standing, the application was doomed to fail. 2. The attorneys suggest the applicant did not have a proper interest in the proceedings or a genuine concern for the welfare of Mrs OKK because "she was conflicted by her role as manager of the aged care facility's financial affairs and she acted against Mrs OKK's wishes by bringing the proceedings". They say that the applicant claims that Mrs OKK consented to this review of the EPA but this is contradicted by Mrs OKK's own statutory declaration, Dr Z's evidence and the information obtained from Mrs OKK by the Tribunal's own case officer. Even if the applicant thought Mrs OKK agreed to the application, she should have been aware that this was no longer the case by the time further evidence was filed in June 2015. The attorneys referred to matters where the Guardianship Tribunal (as it then was) made orders for costs against an applicant who it found lacked standing. They believe this case is analogous. 3. The attorneys also suggest that the application has no tenable basis in fact or law because "by the time of the substantive hearing it was clear that Centrelink had assessed Mrs OKK's income and assets as nil. This meant that her outstanding fees to the aged care facility were no longer accruing" and the application to review the Power of Attorney would have failed. 4. In response, the applicant submits that she had proper concerns for making the application to review the EPA (and therefore standing). These included the amendment of the ACCR form by the attorneys, the difference between the information contained in the ACCR form and the Land Title Search in respect of ownership of the property south west of Sydney, the failure of the attorneys to provide sufficient information to Centrelink to determine Mrs OKK's fee liability, and the failure to make that application, the refusal of the attorneys to sign the Resident and Accommodation Agreement (RAA), and the failure of the attorneys to discuss these matters with the aged care facility. 5. The applicant suggests that the making of the application has to be understood in the overall context of the dealings between the aged care facility and the attorneys. In particular: 1. the aged care facility had attempted since October 2014 when Mrs OKK first became a permanent resident to arrange for the attorneys to sign the RAA; 2. In about January or February 2015, the Department of Social Services had reversed the subsidies Mrs OKK had been receiving from October to December 2014 because it had not received the necessary information about Mrs OKK's income and assets from the attorneys; 3. In February 2015, the aged care facility became aware that the ACCR form had been manually altered to record that the private residence was not owned by Mrs OKK but by family members; 4. There was a further meeting between the applicant and the attorneys on 17 February 2015 in an attempt to resolve these issues. The issues were not resolved on that occasion, or at any time in the next month, despite correspondence between the applicant and the attorneys' solicitors; 5. Title search conducted by the applicant in March 2015 revealed that the property in south west Sydney had only ever been owned by Mrs OKK. 1. As a result of these concerns, Mrs OKK was incurring significant fees which were not being paid and were more than 42 days outstanding. This placed her tenure at risk. The applicant refers to her statement of 29 July 2015 which in turn refers to section 6(2)(d) of the User Rights Principles 2014. This provision allows the care provider to ask a resident to leave where the care recipient has not paid the agreed fee within 42 days after the day when it is payable, for a reason within the care recipient's control. The aged care facility had not sought to exercise this right, but the making of the application was "protective and preventative" in this sense. 2. The applicant also denies being conflicted in her role. She refers to her statement of 29 July 2015 (paragraphs 1 - 3): 1. I am the Business Support Manager of the aged care facility. 2. I am responsible for overall business and support management of the aged care facility… 3. My role does not just cover finances. It also covers client services. The two staff that are responsible for client services report to me. In their absence, those enquiries come to me. In my role I am often required to act as an advocate for a resident. 1. In these circumstances, the applicant claims she had a genuine concern for Mrs OKK, and therefore had standing as an "interested person" under section 35(4) of the Powers of Attorney Act to bring these proceedings. She similarly argues there was a tenable basis for bringing the application. Findings of the Tribunal 1. The Tribunal does not agree there was no tenable basis for making the application in fact or law. In making this finding, the Tribunal has carefully considered the situation as it existed on 23 March 2015 when the applicant completed the application. 2. In his Statement of 22 July 2015 (paragraphs 14 and 15) Mr LQO notes that he sent the initial CAIA form to Centrelink on or about 30 September 2014, but it appeared to have been not received, as they received no information from Centrelink or the aged care facility about Mrs OKK's fee assessment. He had to resubmit the form in December 2014 with a copy of the Power of Attorney. He also states at paragraph 16 of those submissions that he had not been advised of the exact fee liability until he received the Resident and Accommodation Agreement on or about 17 February 2015. The attorneys' submissions of 22 July 2015 are somewhat contradictory suggesting (at paragraph 16, also paragraph 13 of the attorneys' costs submissions of 3 August 2015) that the attorneys first completed the CAIA form in or about December 2014. In any case, the attorneys' submissions confirm that: 1. from December 2014 the aged care facility began invoicing the attorneys the additional daily accommodation payment of $64.15 per day, backdated to 20 October 2014 in addition to the daily care fee (paragraph 17); 2. from February 2015, the aged care facility also began charging an additional means tested fee of $123.29 per day (paragraph 17); and 3. The attorneys paid the daily care fees and pharmacy charges but refused to pay the daily accommodation payment and the means tested fee because Centrelink had not yet conducted their means assessment, and they knew that she would not be liable for this as she had no income or assets on entering the home (paragraph 18). 1. The attorneys also acknowledge in their statements and submissions that this issue was not resolved at the meeting on 17 February 2015, or in subsequent correspondence between the aged care facility and their solicitors. 2. In these circumstances, the applicant (acting on behalf of the aged care facility) was presented with a situation in late March 2015 where the issue of the fee arrears had not been resolved, through matters beyond the control of the aged care facility. In February 2015 the aged care facility had also received specific information from the Department reversing the means testing care fee applied to Mrs OKK in October and November 2014. This was confirmed in a letter to the aged care facility dated 18 December 2014 (although not received for some reason until 28 April 2015) which states in part: Dear Service Provider, I am writing to let you know about the daily fees that may be charged to [Mrs OKK]… The maximum basic daily care fee is $47.15 per day, starting form … 20 October 2014 a means tested care fee of $123.29 per day starting from 20 October 2014 an accommodation payment up to the price agreed with the resident before entry into your care. The…subsidy will be reduced by the same amount as the means tested care fee starting from 20 October 2014. From our records it appears that [Mrs OKK] has not provided income and assets details to [the Department], therefore she may be asked to pay the maximum means tested care fee applicable for her cost of care until the income and assets information is received… (Statement of the applicant dated 29 July 2015 paragraph 25 and attachments E and F) 1. Mrs OKK was therefore incurring considerable fees which were not being paid. The discussions with the attorneys responsible for the management of her financial affairs, and with their solicitors had not resolved this issue. 2. It does appear that the applicant had also formed the view that the attorneys (or at least Ms KAN) had acted improperly by amending the ACCR form to indicate that the south west Sydney property had not been owned by Mrs OKK, but by members of her family. The applicant suggests (her statement of 29 July 2015, paragraphs 13 to 15) that this issue was discussed with the attorneys at the meeting on 17 February 2015, and that the attorneys agreed that Ms KAN had made the amendment. Mr LQO did not comment on this issue in his separate statement. The attorneys suggest in their 22 July 2015 submissions (paragraph 62), that the applicant has not provided any evidence in support of her assertion that Ms KAN altered the ACCR, but this is not correct. The applicant alleges an admission by Ms KAN to this effect in their meeting of 17 February 2015. The Tribunal cannot find that this is specifically denied in the attorneys' submissions. The applicant's suspicions about the actions of the attorneys were further roused by the existence of a title search of the property in south west Sydney which appeared to contradict the information contained on the ACCR. 3. It is not appropriate or necessary to finally determine these questions of fact now after the event, and it was not necessary to do so in the substantive hearing as the applicant withdrew her application in the circumstances outlined above. 4. The question is whether in the words of Justice McHugh of the High Court in the matter of Lai Quin (1997) 186 CLR 622, the proceedings were reasonably commenced. The Tribunal has come to the view that these proceedings were reasonably commenced. By applying to review the EPA, the Tribunal is satisfied that the applicant was seeking a way out of the impasse that had developed. In reviewing the EPA, the Tribunal would be required to examine the operation and effect of the EPA to determine whether it reflected Mrs OKK's wishes, and or was operating in her best interests. It would require the attorneys to account for their actions in circumstances where the aged care facility was not receiving the fully assessed fees, and there was at least some concern that her assets had not been fully disclosed. 5. It is not to the point that the applicant received information later which allayed at least some of her concerns. The question focuses on the information reasonably available to her at the time she made the application. 6. The attorneys also raise the issue of the applicant's standing to make this application. This issue was first raised in the attorneys' submissions of 22 July 2015 at paragraphs 39 to 49. The attorneys suggest the applicant has a "clear conflict of interest" between her interests as business manager of the aged care facility and concern for Mrs OKK's best interests, apparently on the following basis: * She had only known Mrs OKK for 5 months when she made the application; * She did not have day to day interaction with Mrs OKK, nor was she responsible for her care; * Her priority is the management of the aged care facility's finances; * She asked the attorneys to pay an accommodation bond at the February 2015 meeting. 1. The question of a person's standing to make an application is not a separate matter to be considered under section 60(3) of the CAT Act. Nevertheless, it is a factor which has been taken into account in a number of matters in the former Guardianship Tribunal when the applicant was ordered to pay costs. The fact that the applicant in those cases lacked standing was found to be a factor in exercising the discretion to make a costs order. In the Powers of Attorney Act, a person has standing to make an application if they are the attorney, principal, guardian, enduring guardian or "any other person who has a proper interest in the proceedings or a genuine concern for the welfare of the principal" (section 35). This phrase is similar to the phrasing in the Guardianship Act regarding persons entitled to make applications for the appointment of a guardian ("any other person who in the opinion of the Tribunal has a genuine concern for the welfare of the person"). This phrase has been considered on a number of occasions in the former Guardianship Tribunal. The Tribunal has decided that the genuine concern requires: 1. That the applicant is bringing to the attention of the Tribunal a fact situation in which the subject person's interests may call for intervention by the Tribunal; 2. That the applicant is sincere in seeing the situation as one that may call for the intervention of the Tribunal in the interests of the person; and 3. That the application is motivated by a desire to advance the welfare of the person. The interests of the person must be the primary motivation for the application. 1. In answering these questions, the Tribunal has set out a list of non-exhaustive factors that it might find useful to consider. This includes how the applicant explains the reasons for the application, and the steps taken prior to making the application, the relationship of the applicant and the subject person – family, professional, friend, the length of the relationship, the views of the subject person in relation to the matter of concern, whether the applicant has a conflict of interest, and how the applicant proposes to deal with any such conflict. 2. It is not necessary for the Tribunal to determine whether the applicant has standing in this formal sense, separate from determining whether the application had no tenable basis in fact or law. Had it been necessary to determine this matter, the Tribunal would have found that the applicant meets the definition of an interested person under section 35 of the Powers of Attorney Act, as she has a proper interest in the proceedings and a genuine concern for the interests of Mrs OKK. The Tribunal has no reason to doubt the applicant's description of her responsibilities, including client services. The Tribunal does not agree with the attorney's submission that responsibility for ensuring resident's fees is paid necessarily conflicts with the interests of the resident herself. One would think that the opposite conclusion applies. Even if, as the attorneys suggest, the resident's security of tenure is guaranteed under the Aged Care Act 1997 (Cth) except in very limited circumstances, it is presumably in that resident's interests to ensure there is no difficulty or confusion concerning the payment of their proper fees, in a way that might detract or distract from the care they are receiving. 3. The Tribunal accepts that Mrs OKK may not have "authorised" Ms NLE to make the application in the formal sense. There is some evidence that she had initially expressed concerns about her financial position (paragraphs 27 to 30 of the applicant's statement of 29 July 2015), even if at a later time she expressed full confidence in the actions of the attorneys. That Mrs OKK later changes her mind about the application (and the concerns that led to it being made) does not alone establish that the applicant lacked standing to make it, if there was some other proper basis for bringing it. 4. The Tribunal concludes that the application was not so lacking in substance (as was the case in OLL) that there was no tenable basis for it in fact or law. The applicant has been responsible for prolonging unreasonably the time taken to complete the proceedings 1. The attorneys suggest that Ms NLE identified five issues of concern as the basis for making the application: 1. Ms Menzies had altered the September 2014 ACCR; 2. the question of who owned Mrs OKK's south west Sydney property; 3. her mistaken belief that the attorneys had not filed Mrs OKK's Income and Assets form with Centrelink; 4. the attorneys' refusal to sign the Residential Agreement with the aged care facility; 5. the outstanding fees which were putting at risk Mrs OKK's security of tenure. 1. The applicant suggests that it was the combination of these issues which caused her sufficient concern to commence the proceedings. However, the attorneys say the applicant should have been aware by no later than June 2015 that there was no basis for a number of these concerns. The attorneys suggest for example that the applicant failed to exercise due diligence by failing to ask Centrelink prior to making the application whether the Income and Assets Form had been filed. Information from the applicant's statement of 27 July 2015 suggests that the aged care facility's accountant was able to quite readily obtain this information on 21 July 2015. The applicant suggests she may not have brought the application had she had this knowledge at the time. The attorneys submit that this was in the applicant's power and by failing to do so, she caused them to incur significant fees. 2. Mr LQO also filed documents on 10 June 2015 showing that Mrs OKK had agreed to the attorneys putting a caveat over her south west Sydney property, and that she consented to the proceeds of sale of the property going to the attorneys in payment for monies she owed them. The attorneys suggest that this information should have "allayed the applicant's concerns" regarding their actions, and provided reason for her to withdraw the application at that time. 3. Furthermore, the applicant now acknowledges that the aged care facility received a letter from the Department of Human Services notifying her that Mrs OKK's means tested care fees had been assessed at $0.00, backdated to 11 June 2015. This should have provided sufficient information to establish that the attorneys had supplied Centrelink with adequate information to make that assessment. The attorneys note that the applicant states she did not become aware of this decision until 21 July 2015, but the attorneys should not be punished for the applicant's "failure to keep abreast of documentation relevant to the proceedings". 4. In summary, the attorneys submit that: 1. the application would not have been filed if the applicant had exercised due diligence before filing; and 2. once filed, the applicant had a number of opportunities to withdraw the application before she actually did, and that as a result of this; 3. the applicant has unreasonably prolonged the proceedings. 1. In response, the applicant states that she her actions did not result in the unreasonable prolonging of the proceedings because: 1. Regardless of the timing of the applicant's request to withdraw, a hearing was required because of the need for leave of the Tribunal, and that hearing was always set for 29 July 2015; 2. It did not matter therefore that the application for withdrawal could have been made some days earlier. 1. Furthermore, the actions of the attorneys were at least partly responsible for the delay in bringing the matters to a conclusion. The attorneys failed to inform the applicant as soon as possible (presumably when they should have been aware of the applicant's ignorance) that the Income and Assets form had been submitted, that the Department had requested additional information, which the attorneys had then supplied, and that the Department had informed them of Mrs OKK's entitlement to subsidies. Furthermore, it was the attorneys who made the first application for an adjournment of the proceedings in June 2015. 2. The applicant also notes that a substantial portion of the costs claimed by the attorneys had been incurred prior to 22 July 2015, and a withdrawal at that time (rather than seven days later) would have had minimal impact. 3. Finally, the applicant's concerns were not "allayed" by the documents filed by the attorneys on 10 June 2015 relating to Mrs OKK's consent to the caveat over her home and her agreement for the proceeds of sale to be paid to the attorneys. It still remained at that time for the Department to process this information and determine how it was relevant to a determination of Mrs OKK's fee liability. Findings of the Tribunal 1. The Tribunal is not satisfied that the applicant might have avoided making the application at all had it exercised due diligence. The applicant was entitled to rely on the information received from the Department as a basis for determining Mrs OKK's fee liability. The Tribunal accepts that it was not until a few months after filing her application that the applicant became aware of the true state of affairs – namely that the attorneys had in fact submitted the CAIA form, and that Mrs OKK was no longer liable to pay the means-tested fee. Due diligence alone would not have resolved these areas of concern at the time the application was made. 2. The Tribunal accepts that the aged care facility did not become aware that the means-tested fee had been cancelled until 23 June 2015. This was by means of a letter from the Department dated 11 June 2015 which states in part: We are writing to let you know about changes to the daily fees for this resident. The means tested care fee is $0.00, starting from 11 June 2015; and … 1. The applicant states she did not become aware of this letter until 21 July 2015. She explains the reasons for this in the following way (paragraph 59, her statement of 29 July 2015): …the letter is processed by our resident billing officer. She would not normally notify me of such correspondence. The resident billing officer is not aware of this Application because of privacy and confidentiality reasons 1. The applicant states she only became aware of this letter when reviewing the file in week prior to the Statement of 29 July. She then instructed her solicitors to withdraw the Application as the reasons for it no longer existed. 2. The attorneys submit that they "should not be punished for the applicant's failure to keep abreast of documentation relevant to the proceedings." 3. The Tribunal agrees that the applicant should have ensured that she had immediate access to any material which was relevant to the application pending before the Tribunal. Had she done so, it is likely that she would have sought leave to withdraw the application, not two days before the hearing, but about one month before the hearing. The attorneys say this amount to an unreasonable prolonging of the proceedings, or the applicant conducting the proceedings in way that disadvantages another party? The Tribunal does not agree. Given the volume of material that had already been filed by that time, the Tribunal thinks it most unlikely that the request for withdrawal could have been dealt with in other than a formal hearing. On occasions, withdrawal requests are dealt with on the papers. This is not such a case. There were serious allegations made in the initial application, and to some extent supported by documents. They needed to be carefully examined to determine whether Mrs OKK's interests would be adversely affected by permitting the application to be withdrawn. It is likely that the hearing date of 29 July had already been set or that if it had not been set, that an earlier date could not have been obtained. The Tribunal is satisfied therefore that the applicant's error has not resulted in the proceedings being unduly prolonged or being conducted in a way that unnecessarily disadvantaged the attorneys. 4. Nor is the Tribunal satisfied that the documents filed by the attorneys in June 2015 (and served on the applicant) should have inevitably resulted in the applicant seeking to withdraw her application at that point. Those documents went to Mrs OKK's consent to putting a caveat over her Panania property and to the proceeds of sale being paid to the attorneys in consideration of the money she owed them. The Tribunal agrees with the applicant that these were matters for consideration by the Department. Meanwhile Mrs OKK was continuing to incur substantial fee arrears, and the Resident Agreement had still not been signed. The applicant has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings 1. The attorneys suggest that Ms NLE unnecessarily delayed her request to withdraw the application. This disadvantaged them as they had already incurred significant legal fees preparing for the hearing. This issue has been dealt with above. 2. The applicant also failed to provide adequate documentation to support her application at the date of filing, and thereby disadvantaged the attorneys in preparing its response. Without this information, the attorneys were more likely to seek legal advice to contest the application. In fact the applicant could have filed further documentation which was in her possession when she made her application in March 2015. The attorneys know this because Ms NLE subsequently supplied copies of the following documents annexed to her statement of 29 July 2015: 1. Contemporaneous file notes made by herself and Ms LSO following their meeting with the attorneys on 17 February 2015; 2. Copy of the ACCR form from September 2014 being the document Ms NLE claims Ms KAN had altered; 3. Correspondence between the aged care facility and the solicitors for the attorneys; 4. Letter from Department of Social Services to the aged care facility dated 18 December 2014 informing them of the fees to be charged to Mrs OKK. 1. If these documents had been filed, the attorneys suggest they would have better understood Ms NLE's allegations. They suggest Ms NLE should have at the very latest filed these documents once aware that the attorneys were contesting the application after mid-June 2015 when the attorneys filed their own documentation, or at the latest when the attorneys filed their written submissions on 22 July 2015. 2. In response, the applicant submits that most of this information had already been provided to the attorneys. The September 2014 ACCR form was given to the attorneys during the February 2015 meeting. The information in the file notes was summarised in the letter from the aged care facility to the attorneys on 17 February 2015. The attorneys' solicitors would presumably have provided the attorneys with copies of the correspondence between them and the aged care facility. The substance of the December 2014 letter from Department of Social Services was set out in the February 2015 letter to them. 3. The applicant suggests she later provided these documents and notes in full only when it became clear that a number of matters were being disputed by the attorneys. This became clear only after the applicant received the statement of Mr LQO and the attorneys' submissions, both dated 22 July 2015. The applicant submits: The submissions and the statement of [Mr LQO] identified some key misunderstandings that were held on behalf of the attorneys and that had not been clear to the applicant prior to this point. This, at least in part, prompted the further filing of documentation by the applicant. (Submissions, para 53) 1. The applicant also suggests there was no disadvantage to the attorneys from the later provision of this information as they were already well aware of the details about when they applied for the Income and Assets Assessment, what further information they were required to provide, when the decision was made about that application and that Mrs OKK had not been assessed for the accommodation supplement. Findings of the Tribunal 1. The Tribunal does not agree that the absence of all necessary supporting documents from the applicant means that she has conducted proceedings in a way that unnecessarily disadvantages another party. The Tribunal is set up to be relatively informal and is not bound by the rules of evidence. The rules of procedural fairness do apply, and these are reflected in Section 38(5) of the CAT Act. This means that there are no formal rules regarding the filing of material (although the Tribunal can issue Directions in relation to this). Consistent with the statutory requirements and common laws rules of procedural fairness, each party must have the opportunity to comment on material that is significant and relevant to the proceedings. The Tribunal is satisfied that this occurred in the present case. The Tribunal is also satisfied that although not receiving all documents, the attorneys had been put on notice of the main issues of concern by a letter from Ms NLE which followed the February 2015 meeting. 2. It was the attorneys' choice to seek legal advice and representation in circumstances where the applicant had not yet sought her own legal representation. The Tribunal often deals with quite complex matters without any lawyers representing parties. The attorneys were not obliged to do so, and the Tribunal does not accept that there were more likely to do so because not all relevant documents had been filed with the initial application. The Application was vexatious or otherwise misconceived or lacking in substance 1. The attorneys suggest that the applicant's concerns could have been resolved in other ways – by making calls to Centrelink, pursuing correspondence with the attorney' solicitors and otherwise communicating with Mrs OKK and the attorneys. There was only one formal attempt to resolve the issue of Mrs OKK's outstanding fees (the meeting between the applicant and other staff and the attorneys on 17 February 2015). 2. Furthermore, the attorneys suggest that the applicant had failed to particularise her claims that Ms KAN had fraudulently altered the ACCR. No evidence was this was provided until the day of the hearing. 3. In response, the applicant denies that the application could be regarded as vexatious, misconceived, or lacking in substance. She notes there was a series of correspondence between the attorneys' solicitors and the aged care facility following the 17 February 2015 meeting, but no suggestion that the attorneys had taken any further steps to submit the necessary information (Income and Assets details) to Centrelink. Despite a number of requests, the attorneys never confirmed or provided evidence to the aged care facility that they had provided this information to the Department. In fact, the impression given was that no application to Centrelink had been made. The applicant refers to a letter from the attorneys' solicitors dated 19 February 2015 which includes: "Our clients are unable to apply for a Centrelink assessment until sometime next week." Furthermore, no subsidy was being received by Mrs OKK, suggesting to the applicant that the attorneys had not submitted the income and assets information to Centrelink. 4. The applicant also notes she had no independent means of obtaining this information. She suggests that amendments to the Aged Care Act in July 2014 meant that this information was confidential between Centrelink and the resident/family. It is the responsibility of family to pass on that information to the provider. Findings of the Tribunal 1. The recent decision of Hopkins v Governor General of Australia [2013] NSWSC 1068 ('Hopkins') summarized what constituted a "frivolous and vexatious" claim, in that case for the purposes of summary dismissal pursuant to rule 13.14 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). After considering the authorities Justice Garling found (at [70] and [71] that An examination of this claim against these authorities and the statutory provisions demonstrates that Mr Hopkins' claim is hopeless, there is no evidence which exists in support of it, nor can evidence be obtained to support it. I am satisfied that the case is a very clear one. It is obviously untenable and it cannot possibly succeed. It is manifestly groundless and its deficiencies are such as not to admit of any rational argument in support of the relief claimed in the proceedings. 1. There is no definition of "frivolous" or "vexatious" for the purposes of section 60 of the CAT Act within the Act itself or under any relevant subordinate legislation. We have been unable to locate any reported case authority on either of the terms which has emerged since the commencement of operation of the relevant parts of that Act on 1 January 2014. However, there has been considerable past judicial commentary on the terms. 2. In the High Court decision in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125, ("the General Steel Case"), the Chief Justice Sir Garfield Barwick summarised relevant authorities which indicate that caution should be exercised before dismissing any proceeding on the ground that it is frivolous or vexatious. He noted with approval the authorities which indicate that such a power is to be exercised sparingly and is not to be used except in a clear case where the relevant court or tribunal is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion. His Honour went on to say: (the) cases uniformly adhere to the view that the (applicant) ought not to be denied access to the customary tribunal which deals with actions of the kind (he or she) brings, unless (his or her) lack of a cause of action... is clearly demonstrated. 1. His Honour also cited with approval the principle stated in the High Court case of Dey v Victorian Railways Commissioners (1949) 78 CLR 62 ("the Dey Case") to the effect that a case for dismissal on the grounds that proceedings are frivolous or vexatious must be "very clear indeed" in order to justify the summary intervention of the relevant tribunal to prevent the applicant from presenting his or her case. As His Honour Justice Dixon (as he then was) said in that case: ...once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the (tribunal) to dismiss the action as frivolous and vexatious and an abuse of process. 1. In the General Steel Case Barwick CJ also set out with approval various expressions which have been used to describe the concept of "frivolous" as including: so obviously untenable that it cannot possibly succeed; manifestly groundless; so manifestly faulty that it does not admit of argument; a case which the (tribunal) is satisfied cannot succeed; under no possibility can there be a good cause of action; and (where it is) manifest that to allow (the application) to stand would involve useless expense. 1. In relation to the term "vexatious", Barwick CJ in the General Steel Case also cited with approval the judgement of Latham J in the Dey Case which recognised that although a party (such as the attorneys in this case): ...should be "saved from the vexation of the continuance of useless and futile proceedings", great care must be exercised to ensure that under the guise of achieving... finality, (an applicant) is not improperly deprived of (his or her) opportunity for the (determination of his or her application) by the appointed tribunal. 1. In a more recent Federal Court Case, Hatchett v Bowater Tuff Industries Pty Ltd (No 2) (1991) 28 FCR 324 the Court was prepared to go so far as to say that the mere fact that a proceeding is shown to have no foundation in fact is insufficient to justify a finding that it was commenced vexatiously or without reasonable cause, although in JF Keir Pty Ltd v Sparks [2008] FCA 611 at [62], the Federal Court stated the view that an application can be stayed as vexatious "if it can really lead to no possible good". 2. The Tribunal does not find that these proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, in the sense suggested above. The question of tenability has been dealt with above. The attorneys suggest the applicant could have otherwise obtained the information to allay her concerns about their actions or inactions. There is no clear evidence to support this contention, but, even if correct, it does not mean that the proceedings themselves could be described in the above way. The Tribunal has not found the applicant has brought the proceedings for any ulterior motive, to benefit her or her organisation in some way. She had a solid basis for her concerns at the time she made the application, and these were reasonably based on the information available to her at the time, and the failure to resolve matters in other ways. The Tribunal is also satisfied that the attorneys had been placed on notice of the major concerns – including the alleged alteration of the ACCR – by the aged care facility letter to them which immediately followed the February 2015 meeting. Other submissions of the applicant 1. The applicant suggests that the attorneys have failed to comply with the NCAT Procedural Direction (NCAT Guardianship Division Procedural Direction 1). She suggests that the attorneys had made no attempts to resolve the costs issue, or indeed advise that they intended to seek leave to be legally represented until 22 July 2015. The attorneys have also failed to specify the costs sought. Only lump sum amounts are provided without detail of the related work or how the costs were incurred, in circumstances where costs agreements must have been in existence. 2. Furthermore, the applicant suggests that the attorneys did not seek leave to be legally represented until 22 July 2015. The attorneys' submissions suggest that they had already incurred considerable legal costs before then. She also notes that leave had been granted to the applicant on the basis that she would be responsible for her own costs. 3. Furthermore, unlike the other cases to which the attorneys refer where costs have been awarded, the applicant had no ulterior motive in bringing the application, such as preservation of family money or an internal family dispute. This matter, according to the applicant, is more analogous to the matter of TPJ [2015] NSWCATGD 15 – a matter in which an application for costs was refused. 4. Tribunal has decided for the reasons indicated above that there are no special circumstances warranting a departure from the general rule that each party pay their own costs. It is therefore not necessary to deal with these further submissions in any detail. Subsequent Information received from the applicant 1. On 9 September 2015, the solicitor for the applicant wrote to the Tribunal noting that part of the factual basis for the applicant deciding to withdraw the application has now proved to be inaccurate. Specifically, the applicant now understood that the attorneys had not in fact completed thew Combined Income and Assets Assessment (CIAA) form to Centrelink. She submits copy of correspondence from Medicare (Department of Human Services - DHS) indicating that the CIAA form submitted by the attorneys in February 2015 was incomplete, and the assessments team was unable to contact the attorneys to follow up on this information. The means tested fee payable by Mrs OKK had only been removed from 11 June 2015 as Mrs OKK had reached the "cap limit" on 15 May 2015. Unless further information was provided, the means tested fee was to recommence from 20 October 2015, being 12 months from her date of admission. The solicitor for the applicant requested that the matter be relisted to discuss this development. 2. On 16 September 2015, the Tribunal contacted the barrister for the applicant – Ms Karen Jones, and the solicitor for the attorneys Mr George Elias to discuss these matters. Ms Karen Jones submitted that this further information was relevant to the question of costs because it provides further reasons for the concerns of the applicant and the tenability of the application. It means that the attorneys cannot say that Centrelink has assessed Mrs OKK's income and assets as nil. Mr Elias suggested that the only relevance of the DHS correspondence was that it could not contact the attorneys to confirm they had authority to provide information on behalf of Mrs OKK. It does not change the reality that she is not liable for any additional means-tested fee. 3. It was also unnecessary and perhaps improper for the Tribunal to consider this further evidence from the applicant received after the Tribunal had consented to the application being withdrawn. Both the applicant and the attorneys were given a chance to comment on this material. Suffice to say that this material did not affect the Tribunal's decision on the application for costs. Irrespective of the further information received from the Department, the Tribunal decided that there were no special circumstances justifying the awarding of costs to the attorneys. Conclusion 1. In Whiteoak v State of NSW [2014] NSWCATAD 45, the Appeal Panel referred to Brooks Maher v Cheung (2001) NSWADT 18 in relation to how "special circumstances" might be interpreted. This decision suggested that "special circumstances" in the context of a costs claim were those which "take the matter out of the ordinary course of events, without having to be extraordinary or exceptional" or (per Kondos v Citadin Pty Ltd (LSD) [2003] NSWADATP7 at [25] "where there are factors which extend beyond those reasonably connected with the usual or ordinary pursuit of a claim". 2. On the basis of the above 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 or unusual in the way in which the applicant brought or conducted these proceedings. 3. The request for costs is therefore refused. ********** 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: 03 March 2016