Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Lin v Chief Commissioner of State Revenue [2018] NSWCATAD 98 Hearing dates: On the Papers Date of orders: 14 May 2018 Decision date: 14 May 2018 Jurisdiction: Administrative and Equal Opportunity Division Before: NS Isenberg RFD, Senior Member Decision: The Applicants shall pay the Respondent's costs of the proceedings from 22 February 2017 to 13 December 2017 inclusive as agreed or failing agreement as assessed. Catchwords: COSTS – whether there were special circumstances and if so did they warrant an order for costs – indemnity costs – s 60 Civil and Administrative Tribunal Act 2013 Legislation Cited: Administrative Decisions Tribunal Act 1997 (repealed) Civil and Administrative Tribunal Act 2013 Cases Cited: A J Holdings (NSW) Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 143 Australian Securities Commission v Aust-Home Investments Limited (1993) 44 FCR 194 BHR and BHS v Biripi Aboriginal Children's Services (No 2) [2015] NSWCATAD 109 Calderbank v Calderbank [1975] 3 All ER 333 Ceepee Pty Ltd v Roads and Maritime Services [2015] NSWCATAD 130 Citadin Pty Ltd (No. 2) -v- Eddie Azzi Australia Pty Ltd & General Pants Co Pty Ltd (RLD) [2001] NSWADTAP 31 CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 CRIPPS and Another v G & M DAWSON Pty Ltd and Another; G & M DAWSON Pty Ltd and Another v CRIPPS and Another [2006] NSWCA 81 Fitzpatrick Investments Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 103 Messiter v Hutchison (1987) 10 NSWLR 525 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170 Peng v Chief Commissioner of State Revenue [2009] NSWADT 295 Redmadi Pty Ltd v Chief Commissioner of State Revenue [2017] NSWCATAD 231 Residents against Improper Development Incorporated and Another v Chase Property Investments Pty Ltd (2006) 149 LGERA Texts Cited: Administrative and Equal Opportunity Division Costs Guidelines – August 2017 Paper delivered by the Hon Justice M J Beazley AO on 14-15 March 2008 to Australian Lawyers Alliance Category: Costs Parties: Mingchi Lin and Yihong Huang (Applicants) Chief Commissioner of State Revenue (Respondent) Representation: Counsel: E White (Applicants) AH Rider (Respondent) Solicitors: Legal Point Lawyers (Applicants) Crown Solicitor's Office (Respondent) File Number(s): 2016/00378479 REASONS FOR DECISION Background 1. The substantive issue in these proceedings involved the Applicants' application to the Tribunal to review a decision by the Respondent (sometimes called the Chief Commissioner) in respect of the Applicants' liability to pay land tax (the Review Application). 2. On 13 December 2017 the Tribunal dismissed the Review Application. The Respondent sought an order that the Applicants pay the costs he incurred in the proceedings, including on an indemnity basis from 10 May 2017. 3. At the close of the hearing on 13 December 2017, the parties were directed to file and serve (provide) written submissions and evidence in respect of the Respondent's costs application (the Application) so as to enable the Application to be determined on the papers. Neither party objected to the Application being determined without an oral hearing. Accordingly, this Application is determined on the papers pursuant to s 50 of the Civil and Administrative Tribunal Act 2013 (CAT Act). A timetable was specified to which neither party objected. The Respondent provided submissions and evidence in accordance with the timetable. The Applicants, for reasons which have not been provided to the Tribunal, neither filed nor served any relevant submissions or evidence at any time. The Tribunal's power to award costs 1. The Tribunal's power to award costs is set out in s 60 of the CAT Act as follows: 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. References in these reasons to legislative provisions are to provisions of the CAT Act unless stated to the contrary. 2. As can be seen from s 60(1), the ordinary rule is that each party to the proceedings is to pay their own costs. However, s 60(2) provides that if the Tribunal is satisfied that there are "special circumstances warranting an award of costs", then in accordance with s 60(4) the Tribunal may determine by whom and to what extent costs are to be paid, including whether costs are to be assessed and if so the basis for the assessment. Section 60(5) sets out, on an inclusive basis, the meaning of the word "costs" for the purpose of s 60. 3. Relevantly, in Ceepee Pty Ltd v Roads and Maritime Services [2015] NSWCATAD 130 (Ceepee) Montgomery SM said: 10 Where a court or a tribunal is conferred with the discretion to award costs, such discretion must be exercised judicially and not capriciously (Oshlack v Richmond River City Council (1998) 193 CLR 72 at 81). The fundamental rationale for the awarding of costs is that such an award is compensatory, not punitive: Latoudis v Casey (1990) 170 CLR 534 at 543; Oshlack v Richmond River Council (1998) 193 CLR 72 at 97. … 17 It is the applicant for costs who bears the onus of establishing an entitlement to costs in a jurisdiction where the primary rule is that each party bears their own costs: Kurmond Homes Pty Ltd v Spiteri [2015] NSWCATAP 48 at paragraph [18]. 1. The term "special circumstances" is not defined in s 60 or elsewhere. However, s 60(3) provides that, in making a determination as to whether there are special circumstances which warrant a costs award, the Tribunal may have regard to the matters set out in paragraphs (a) to (f) of s 60(3) as well as "any other matter that the Tribunal considers relevant", s 60(3)(g). 2. In A J Holdings (NSW) Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 143, (AJ Holdings) Sorensen SM said: 14 It is not enough or sufficient to exercise the discretion that the circumstances are "special"; the special circumstances identified must also "warrant" an order for costs: B and L Linings Pty Ltd and Anor v Chief Commissioner of State Revenue (No 4) (RD) [2008] NSWADTAP 14 (B & L Linings) at [56]; Fitzpatrick Investments Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAD 103 at [18-21] (Fitzpatrick Investments). … 15 … For the purposes of s 60(2), "special circumstances" are circumstances surrounding the conduct of the case that are out of the ordinary, but without having to be extraordinary or exceptional: Megerditchian at [11], Spiteri at [54], [60], eMove at [48], B & L Linings at [56-69], CPD Holdings Pty Ltd (t/as Bathroom Exchange) v Baguley [2015] NSWCATAP 21 (CPD) at [24], [29], [30], [32]. It seems the core of the idea of "special circumstances" is that there is something unusual or different to take the matter out of the ordinary course: Fitzpatrick Investments at [19]. 1. The above description of "special circumstances" has been applied in numerous cases including those referred to in AJ Holdings at [15], in Redmadi Pty Ltd v Chief Commissioner of State Revenue [2017] NSWCATAD 231 at [137], and in Fitzpatrick Investments at [17] and [20]. In particular, at [60] in CRIPPS and Another v G & M DAWSON Pty Ltd and Another; G & M DAWSON Pty Ltd and Another v CRIPPS and Another [2006] NSWCA 81, Santow JA, with whom Mason P and Brownie JA agreed, said that for special circumstances to apply in relation to an application by the Chief Commissioner for costs before the Tribunal and Appeal Panel of the Tribunal's predecessor, the Administrative Decisions Tribunal (ADT), (in respect of relevantly identical legislation concerning the award of costs) "For this purpose, it suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional." Chronology 1. The Respondent's written submissions in support of the Application include a chronology which has regard to events which occurred from 13 December 2016. Set out below is the Tribunal's chronology including the context in which events occurred. So far as the Tribunal is aware, there is no dispute as to the accuracy of the below chronology. 2. On 13 December 2016, the Tribunal made consent orders including that the Applicants were to provide their evidence and written submissions by 21 February 2017. 3. On 22 February 2017, having failed to provide any documents, the Applicants, through their solicitors, contacted the Respondent's solicitors and informed them that (notwithstanding the consent orders of 13 December 2016) their clients were overseas, the solicitors were unable to obtain instructions and they required an extension of time to the then current timetable. 4. On 2 March 2017, following the Applicants' advice of 22 February, the Respondent's solicitors requested that the Tribunal make draft consent orders dated 1 March 2017. Those draft orders, amongst other matters, replaced the 13 December 2016 order that the Applicants provide evidence and submissions by 21 February 2017 with an order extending the date to 17 March 2017. 5. On 7 March 2017 directions were made that the matter was stood over for further directions on 21 March 2017 and the Principal Member presiding informed the parties, through their solicitors, that the Tribunal would be "cross" if the Applicants did not comply with the extended timetable which they had requested and agreed to. 6. At the directions hearing on 21 March 2017, further consent orders were handed up to the Tribunal including that the Applicants provide evidence and submissions by 21 April 2017, a delay of a further 5 weeks. Mr Wu, solicitor for the Applicants, informed the Tribunal that: 1. he was having difficulty obtaining instructions from his clients who were in China for medical treatment; 2. the Applicants' adult children were also overseas; 3. medical certificates concerning the relevant medical treatment would reach the Tribunal in four weeks; and 4. [importantly] the Review Application may be dismissed unless the Applicants complied with the further amended timetable. 1. The Tribunal made the requested consent orders, including vacating the consent orders of 7 March, and set the matter down for further directions on 2 May 2017. The Tribunal also ordered that any evidence or written submissions provided for the Applicants after 21 April 2017 may not be relied on by the Applicants. 2. On 21 April 2017 the Applicants provided an affidavit by Mr Lin and written submissions. 3. At the directions hearing on 2 May 2017, counsel for the Chief Commissioner informed the Tribunal that the Respondent wished to consider his position. The proceedings were adjourned by consent to 16 May 2017 for further directions. 4. Also on 2 May, the Respondent's solicitor sent a "without prejudice save as to costs" letter to the Applicants' solicitor (the 2 May offer) offering to settle the proceedings on a specified basis. The offer was open until 4 p.m. 10 May 2017. 5. On 10 May 2017, the Applicants' solicitor sent a "without prejudice save as to costs" letter (the 10 May letter) to the Respondent's solicitor rejecting the 2 May 2017 offer and making a counter offer. The letter stated that if certain specified amendments were made to the draft consent orders attached to the 2 May letter, the Applicants were "willing to discuss possible settlement". The 10 May letter provided no deadline for a response. 6. On 16 May 2017 the Tribunal made consent orders to the effect that the Respondent was granted leave to issue summonses by 30 May 2017, returnable on 15 June 2017; the Respondent was to provide all his evidence and submissions by 25 July 2017; the Applicants were to provide all evidence and submissions in reply by 8 August 2017; and the matter was listed for hearing on 13 September 2017 for one day. 7. On 20 July 2017 the Respondent provided a tender bundle of documents and written submissions. 8. Notwithstanding the Tribunal's orders of 16 May 2017, the Applicants failed to provide any evidence or submissions in reply by 8 August 2017. 9. On 21 August 2017 the Respondent's solicitor sent a "without prejudice save as to costs" letter (the 21 August offer) to the Applicants' solicitor inviting the Applicants to reconsider the 2 May offer. The 21 August offer extended the time for acceptance of the 2 May offer to 31 August 2017. 10. By letter dated 22 August 2017 the Respondent's solicitors informed the Applicants' solicitors that the Respondent required both Applicants to be available for cross-examination at the 13 September hearing. 11. By letter dated 31 August 2017 the Applicants solicitors informed the Respondent's solicitors that the 21 August offer was not accepted and made a counter-offer. The counter-offer would remain open until 4 p.m. on 8 September 2017. 12. By letter dated 5 September 2017, 8 days before the agreed date for the scheduled hearing, 14 days after being informed that the Respondent required both Applicants to attend the hearing in person and 112 days after the hearing had been set down by consent for 13 September, the Applicants' solicitors informed the Respondent's solicitors that: 1. the Applicants would be unable to attend the 13 September hearing in person; 2. Mr Lin was receiving treatment for a medical condition and would be unable to fly back to Australia as that would disrupt his treatment; 3. the Applicants' solicitors were liaising with the Tribunal to arrange for a telephone conference and interpreter to enable [the Applicants] to be cross-examined by phone at the hearing. 1. By letter marked "without prejudice save as to costs" dated 6 September 2017 the Respondent's solicitors informed the Applicants' solicitors that the 31 August offer was rejected and the Respondent made a counter-offer which would remain open for acceptance until 4 p.m. Friday, 8 September 2017. 2. By open letter dated 6 September 2017 the Respondent's solicitors informed the Applicants' solicitors that, amongst other matters: 1. the Applicants' solicitor's 5 September letter was the first notice from the Applicants that they would be in China and not physically present for cross-examination at the 13 September hearing; 2. the Respondent required both Applicants to be available in person on 13 September for cross-examination; 3. it would not be functional for the Applicants to be cross-examined from China over the telephone with an interpreter, particularly as Mr Lin's "hearing may be affected by the alleged [medical] treatment he is having". The Respondent's solicitors noted that the Applicants had not adduced any medical evidence as to Mr Lin's treatment nor whether this may affect his capacity as a witness nor his ability to be cross-examined by telephone; and 4. the Applicants were invited to seek an adjournment of the hearing by 12 noon Thursday, 7 September. If the Applicants failed to seek an adjournment, the Respondent would seek to urgently relist the matter for directions. If the matter could not be relisted given the proximity of the hearing the Respondent may seek summary dismissal pursuant to s 55(1)(c) for the Applicants' failure to appear. 1. By letter dated 7 September the Applicants' solicitors informed the Respondent's solicitors, that amongst other matters: 1. Mr Lin's 20 April affidavit included a medical diagnosis certificate dated 15 March 2017 from No. 1 Hospital Affiliated to Xiamen University in China (the Xiamen Hospital) which provided details of a medical condition diagnosed in February 2017 (sic) and that "long-term medical treatment is highly needed without disruption"; 2. Mr Lin could not travel to Australia for cross-examination and the Applicants' solicitors suggested that he be cross-examined over the telephone; 3. the Applicants understood their obligation to assist the Tribunal; and 4. if the Respondent insisted on Mr Lin attending for cross-examination the hearing should be adjourned until mid-December 2017. 1. On 8 September 2017 the Tribunal made the following orders and/or directions: 1 The application by Mr Lin to appear by phone at the hearing on 13 September 2017 is refused. 2 The request by Mr Lin to adjourn the hearing on 13 September 2017 to a date in December 2017 is refused. 1. On 12 September 2017 during an exchange of emails between the solicitors for parties: 1. the Respondent's solicitors stated at 10:10 a.m. that, at the directions hearing on 8 September, the Tribunal ordered that: The hearing will proceed on 13 September 2017. Mr Lin is required to be physically present at the hearing for cross-examination and if not, strong medical evidence is required that he could not fly and could not be physically present. If the Tribunal is satisfied that Mr Lin could not fly to be physically present at the hearing, the Tribunal will consider whether a video link is approved to enable cross-examination which the Applicants organise. If the Tribunal is not satisfied with any medical evidence from Mr Lin, the proceedings will proceed but the Applicants cannot rely upon Mr Lin's evidence. 1. The Respondent's solicitors also stated they were: [I]nstructed to seek summary dismissal of the proceedings with the Applicants paying the Respondent's costs should the Tribunal not be satisfied with the medical evidence and prior to the proceedings being conducted without that evidence. 1. The Applicants' solicitors then informed the Respondent's solicitors that they were seeking further instructions which they expected to receive that day and requested details of the basis for the Respondent claiming he was entitled to seek costs against the Applicants. 2. The Respondent's solicitors replied to the effect that the Respondent may make an application for summary dismissal and if successful may seek his costs on the bases that the Applicants delayed the proceedings; failed to prosecute their case, in particular where the Applicants could not rely on Mr Lin's affidavit and were unable to discharge their onus of proof; that it was necessary for the Respondent to seek to have the matter listed for urgent directions on 8 September and to prepare for and appear on that day; and that at the time of receipt of notice that the Applicants would not be attending the hearing in person, the Respondent was in the advanced stages of preparing his case for the hearing. 3. The Respondent's solicitors also forwarded to the Applicants' solicitors a copy of the Tribunal orders made on 8 September. 4. At 5.07 pm on 12 September the Applicants' solicitors informed the Respondent' solicitors that: 1. the 8 September hearing was requested by the Respondent on 7 September and there was insufficient time for the Applicant to provide evidence that he was unfit to travel to the hearing and "Refusal of cross examination via phone or visa video link (sic) or refusal of adjournment is unjust and unfair for the [Applicants]"; 2. Mr Lin's medical certificate was just sent and an English translation was attached; and 3. the offer of 6 September which expired on 8 September was carefully considered by the Applicants and rejected. 1. I observe that the attached translated certificate was dated 11 September 2017 and was from the same doctor who provided the medical diagnosis certificate dated 15 March 2017 from the Xiamen Hospital referred to in the 7 September letter at [31]. The certificate was translated in Sydney on 12 September. 2. The translation of the 11 September certificate stated amongst other matters that as at 11 September 2017 Mr Lin was receiving treatment "on one session of three months. During the treatment session, the patient is not supposed to travel and try to avoid fatigue, especially he shall not travel by air … to prevent deterioration of the medical condition." 3. At the directions hearing on 13 September 2017 the matter was adjourned for further directions on 19 September. 4. On 19 September I made the following consent orders: 1. the proceedings were listed for hearing on 13 December 2017 for one day; 2. both Applicants were to be available in person for cross-examination at the hearing; 3. if Mr Lin was not available in person for cross-examination, the proceedings would be dismissed; and 4. costs were reserved. 1. At the hearing on 13 December 2017 the Applicants were represented by Mr White of counsel and the Respondent by Mr Rider of counsel. Neither of the Applicants attended the hearing. 2. I informed the parties' representatives that I was considering dismissing the proceedings under s 55(1)(d) for want of prosecution rather than pursuant to s 55(1)(c) for failure to appear. I observed that dismissal pursuant to s 55(1)(c) would, pursuant to s 55(2), enable the Applicants to seek reinstatement of the proceedings if they subsequently provided a reasonable explanation for their failure to appear. 3. Mr White declined to make any submission opposing the dismissal of the proceedings nor did he indicate a preference for an order pursuant to s 55(1)(c) rather than s 55(1)(d). 4. I ordered that the proceedings be dismissed pursuant to s 55(1)(d). 5. Mr Rider applied for a costs award. I directed that: 1. the Respondent provide evidence and submissions in support of his costs application by 31 January 2018; 2. the Applicants provide evidence and submissions by 14 February 2018; and 3. the Respondent had leave to provide evidence and submissions in reply by 21 February 2018. 1. The Respondent provided his material on 30 January 2018. 2. As at 24 April 2018 the Applicants have provided no documents in respect of the Application. What are "special circumstances warranting an award of costs"? 1. "Special circumstances" are not defined. However, their meaning has been considered in several court and tribunal hearings including the following. 2. In Fitzpatrick Investments, a costs application by the Chief Commissioner following the withdrawal of a review application on the afternoon of the last business day before a hearing and after 16 directions hearings, Verick SM considered what would constitute "special circumstances" and said: 18 The expression "special circumstances" is also found in other legislation and a similar interpretation has been suggested. For example, in Brian Lewis Groth v Secretary Department of Social Security [1995] FCA 1708 in considering whether there were "special circumstances" in Mr Groth's case which rendered it appropriate to disregard the whole or part of certain compensation payments he had received in the assessment of his pension entitlement under s 1184 of the Social Security Act 1991, Kiefel J agreed that the phrase "special circumstances" although imprecise is sufficiently understood not to require judicial gloss and that, for purposes of the appeal before her Honour, the only inquiry to be undertaken was whether there were special circumstances "to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case". 19 In two other decisions, Burchett J in the Federal Court took the same approach, although in different contexts. In Minister for Community Services and Health and Medicare Participation and Review Committee v Chi Keong Thoo [1988] FCA 54, Burchett J expressed the view that "the core of the idea of 'special circumstances' is that there is something unusual or different to take the matter out of the ordinary course". And in Holpitt Pty Ltd v Varimu Pty Ltd & Others [1991] FCA 269; (1991) 103 ALR 684, his Honour made a similar observation that the expression requires some circumstance which takes the matter out of the ordinary course but also cautioned that – As far as the expression "special circumstances" is concerned, it is an expression which is liable to be misunderstood unless care is taken to ask and answer the question, special in relation to what? "Special" is one of those words which derive almost all their meaning from the context. In relation to animals generally, any man is special; but when you are speaking of poets, he may need to be Milton. 20 In order to invoke s 60 and award costs in a matter, it is accordingly necessary to be satisfied that there are circumstances relating to the conduct of the proceedings that are clearly out of the ordinary. The circumstances "do not have to be extraordinary or exceptional". In determining that there are special circumstances, grossly unreasonable conduct or a finding of "serious unfairness" are not prerequisites to such a determination, they are nonetheless highly relevant considerations. 1. Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 (Lai Qin), involved a costs application against the Minister. The applicant had applied for a protection visa which application was rejected by the Minister. The applicant sought review by the Refugee Review Tribunal, which on 6 October 1996 affirmed the Minister's decision. On 15 January 1996 the applicant commenced proceedings against both the Minister and the Refugee Review Tribunal and on 22 January 1996 the Minister, having reconsidered his previous decision, granted the applicant the protection visa for which she had applied. 2. In Lai Qin, His Honour McHugh J said: In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits … When there has been no hearing on the merits … a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order ... it is not the function of a court on a costs application - in most cases at all events - to make a prediction as to the outcome of a hypothetical case. 1. The appeal panel of the ADT said at [6] in Citadin Pty Ltd (No. 2) -v- Eddie Azzi Australia Pty Ltd & General Pants Co Pty Ltd (RLD) [2001] NSWADTAP 31 (Citadin): The usual rule in the Tribunal is that parties bear their own costs of proceedings. Being successful in proceedings is not in itself a special circumstance. There must be some additional factor or factors present in the case to justify an award of costs. Withdrawal by an applicant of an application after a date for hearing has been set, and in circumstances where the respondent has incurred expense in briefing counsel, may be such a circumstance: see Graham -v- Director General, Department of Community Services [2001] NSWADTAP 4. 1. The above extract from Citadin was cited in CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [28] and in AJ Holdings at [16]. Consideration of the Respondent's submissions having regard to s 60(3)(a) to (g) of the CAT Act 1. References to paragraph numbers of the Respondent's submissions are to his written costs submissions dated and filed 30 January 2018 (RS). The Respondent also relies on an affidavit of Kimberly Lorna McKee made and filed 30 January 2018. 2. RS contained submissions, from [34] to [40], which the Respondent says address the matters in s 60(3). The Applicants, without providing any explanation, have failed to provide evidence or submissions in respect of the Application, have not contacted the Tribunal since the scheduled hearing on 13 December 2017, and accordingly did not challenge any aspect of RS. As the Applicants did not object to Ms McKee's affidavit, I have taken both the affidavit and the documents attached to it into consideration for the purpose of these reasons. Section 60(3)(a) - whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings. 1. The Respondent submitted at [34] that: … the Applicants' conduct unnecessarily disadvantaged the Respondent by causing him to incur unnecessary time and costs in: a. having to relist the matter for directions hearings on several occasions due to the Applicants breaching the timetable; b. failing to accept the Respondent's offers to settle the proceedings, which would have saved the time and costs of the matters above and below; c. making increasingly unfavourable counter-offers, which were unrealistic, unacceptable and unnecessarily prolonged the proceedings; d. preparing his evidence and submissions in the substantive proceedings in circumstances where the Tribunal dismissed the proceedings because the Applicants failed to prosecute their case; e. preparing the cross-examination of Mr. Lin and for the hearings set down on 13 September 2017 and 13 December 2017, neither of which proceeded because Mr. Lin failed to appear; and f. preparing his evidence and submissions in chief and reply in support of his costs application. 1. In respect of RS [34(a)], I find that, having regard to the above chronology, as a result of the Applicants' failure to comply with orders/directions of the Tribunal on multiple occasions necessitating multiple additional hearings, the Respondent was disadvantaged in that he was required to prepare for and attend hearings, which would otherwise not have been required (except perhaps in relation to an application by the Respondent to issue summonses and the Tribunal setting the matter down for a hearing) on 7 and 21 March 2017, 2 and 16 May 2017, 8, 13 and 19 September 2017 and 13 December 2017. 2. As to RS [34(b)] I find that the failure by the Applicants to accept the Respondent's offers to settle the proceedings may well have saved the time and costs of the additional unnecessary hearings. However, the Review Application was not heard by the Tribunal and it has not considered the substantive issues. 3. Accordingly, while I accept that the Applicants' failed to accept the Respondent's settlement offers, I cannot determine whether in so doing the Applicants acted unreasonably and thereby unnecessarily disadvantaged the Respondent. 4. Similarly, I cannot determine whether the Applicants' counter-offers were unrealistic or unacceptable as submitted at [34(c)]. 5. I find that no explanation has been provided to the Tribunal as to why, having regard to the Tribunal's consent orders that the Review Application would be dismissed if Mr Lin did not attend for cross-examination, the Applicants' solicitors did not inform the Respondent until 4.21 pm the day before the scheduled hearing date that Mr Lin would not attend the 13 December. Nor is there any explanation as to why the Applicants did not: 1. inform the Tribunal prior to the hearing date that their clients would not attend the hearing. 2. withdraw the Review Application prior to 13 December. 1. I find the statement in the Applicants' solicitors email of 12 December to the Respondent's solicitors that the failure of both Applicants to attend was "due to Mr Lin's health issue" highly implausible notwithstanding that the Applicants' solicitors, presumably on instructions from their clients, consented on 19 September 2017 to the proceedings being listed for hearing on 13 December and provided no further communication to the Respondent concerning Mr Lin's health prior to the afternoon before the hearing. 2. As to the Respondent's submissions in [34(d) and (e)] I find that the time and effort expended by the Respondent, in preparation for the two hearings set down for September and December, was necessary on the basis that the Respondent reasonably expected the hearings to occur but ultimately that expenditure of time and effort was thrown away as the hearings did not occur. 3. The 13 September hearing was adjourned because the Applicants' letter of 5 September 2017 stated Mr Lin was receiving medical treatment and he was unable to fly to Australia as that would disrupt his treatment. The adjournment was supported by the second medical diagnosis certificate. No medical evidence was produced explaining why Mr Lin did not attend the 13 December hearing. I also observe that no evidence was brought to the Tribunal's attention that Mr Lin's medical condition in any way restricted or precluded Yihong Huang's attendance at the hearing scheduled for either September or December 2017. 4. On the one hand the medical diagnosis certificates state that Mr Lin was first diagnosed in 2005; particular symptoms were observed in 2007 necessitating long-term medical treatment without disruption; the Applicants' first diagnosis certificate dated March 2017 recommended long-term treatment at the hospital; the Applicants' second diagnosis certificate from the same doctor dated 11 September 2017 stated one session of three months was then current necessitating no air travel. On the other hand the Applicants' untested submissions, filed 27 April 2017 in respect of the Review Application, asserted at [16] that Mr Lin spent 248 days in Australia in 2010 and 101 days in Australia in 2011 and at [17] "the length of time for each visit usually from about one week to one month" Mr Lin spent time almost every month of the 2010 tax year in Australia "and in total has spent over 65% of his time in 2010 residing in Australia". 5. There is no medical evidence before me to the effect that Mr Lin could not travel to Australia in December 2017 for a one-day hearing of the Review Application or for any other purpose. 6. As to the submissions at [34(f)] I am not satisfied that the costs of preparing evidence and submissions in chief in support of the Application are costs of the substantive proceedings. I also observe that as the Applicants did not provide any evidence or submissions in respect of the Application it is not appropriate for the Respondent to seek costs of a reply to the Applicants' non-existent documents. Section 60(3)(b) - whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings. 1. At [35] the Respondent made detailed submissions including the Applicants: a. failing to file and serve their evidence and submissions in accordance with the Tribunal's timetable; b. failing to accept the Respondent's offers to settle the proceedings, which could have concluded the proceedings as early as 10 May 2017; c. making unrealistic counter-offers, which were unacceptable and unreasonably prolonged the proceedings; d. putting the Respondent to the unnecessary time and effort of preparing his evidence and submissions in the substantive proceedings in circumstances where the Tribunal dismissed the proceedings because the Applicants failed to prosecute their case; e. failing to discontinue the proceedings at an early stage where later circumstances appeared to indicate that the Applicants did not genuinely intend to prosecute their case; f failing to appear in person on the two hearing dates, which caused the first hearing on 13 September 2017 to be abandoned and caused the proceedings to be unnecessarily prolonged for three months to the second hearing date on 13 December 2017, which also did not proceed and resulted in the dismissal of the Applicants' case; and g. causing the Respondent to unreasonably incur time and costs to such an extent that he was required to make an application for his costs, which itself has prolonged the completion of the proceedings. 1. Having regard to the above chronology, I find that as to submission: 1. [35(a)] as a result of the Applicants' multiple failures to comply with the orders/directions of the Tribunal either at all or in a timely manner, the multiple failures by the Applicants to provide instructions to their solicitors, the delays by the Applicants in notifying the Respondent of their failure to obtain instructions from the Applicants; and 2. [35(f)] the late notice by the Applicants to the Respondent that Mr Lin would not appear in person on the two hearing dates, caused the first hearing date to be vacated and the Review Application to be dismissed on the second hearing date. The Applicants also failed to provide medical evidence to the effect that Mr Lin's attendance in Australia for a hearing on 13 December would disrupt his medical treatment, were responsible for prolonging unreasonably the time taken to complete the proceedings. 1. The Review Application was not heard by the Tribunal, accordingly; 1. as to submission [35(b)], I cannot determine whether the Applicants unreasonably prolonged the time taken to complete the proceedings, and. 2. as to [35(c)] I cannot determine whether the Applicants' counteroffers were unrealistic or unacceptable and accordingly cannot determine whether they unreasonably prolonged the time taken to complete the proceedings. 1. Having regard to my above findings as to submissions [(35)(a) and (f)] it is not necessary for me to make any findings in respect of the remaining submissions in [35]. Section 60(3)(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. 1. Under the heading "Applicants' case was weak and made claims that had no tenable basis in fact or law" the Respondent relied on [36] and his written submissions in the substantive proceedings. I observe that RS [36] deals with untested submissions as to the substantive proceedings and refer to the statement by His Honour McHugh J in Lai Qin that: … When there has been no hearing on the merits … a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order ... it is not the function of a court on a costs application - in most cases at all events - to make a prediction as to the outcome of a hypothetical case. 1. Accordingly, I make no finding as to the relative strengths of the claims made by each party in the substantive proceedings. Section 60(3)(d) - the nature and complexity of the proceedings. 1. This statutory provision was dealt with in RS [37] where the Respondent submitted: Applicants complicated the proceedings 37. The Applicants' conduct complicated the proceedings by: a. causing the Tribunal to set down multiple directions and substantive hearings, which required the Respondent to spend unnecessary time and cost on the attendant correspondence and preparing for and appearing at the multiple hearings; and b. adducing evidence that Mr. Lin's medical treatment was the "main reason" the Applicants spent so much time in China, which required the Respondent to issue multiple summonses to obtain documents which tested such evidence and ultimately showed it was implausible for the above reasons. 1. The Respondent made no submissions that the Applicants' conduct affected the nature of the proceedings. Accordingly, I deal solely with the submission that the Applicants' conduct complicated the proceedings. 2. As to RS [37(a)] I have dealt elsewhere with the disadvantage caused to the Respondent, including incurring unnecessary expense, by the need for the Respondent to be involved with multiple directions hearings and substantive hearings. 3. The Applicants' conduct involving the health and medical treatment of Mr Lin throughout 2017 caused an additional workload and complexity for the Respondent. It is not out of the ordinary for a party to proceedings before the Tribunal to have medical issues and for those issues to require medical treatment. However, the number of additional directions hearings and ultimately, the lack of medical evidence before the Tribunal in respect of the reasons for Mr Lin's failure to attend the 13 December hearing were in my opinion out of the ordinary even if they were not extraordinary or exceptional. 4. No reason was given for Yihong Huang's failure to attend either the September or December hearings. Nor was any reason given for Yihong Huang's failure to give evidence to the Tribunal. 5. In my opinion the matters referred to in the two preceding paragraphs added unnecessary complexity to the proceedings in that the Applicants failed to co-operate with the Tribunal to give effect to the guiding principle in proceedings in which the Applicants had sought the assistance of the Tribunal. 6. I also find that the ongoing failures to support allegations concerning Mr Lin's medical treatment in conjunction with ongoing failures and/or delays by the Applicants to provide instructions to their solicitors unnecessarily increased the complexity of the pre-hearing proceedings and as such constituted special circumstances warranting an award of costs. 7. Submission [37(b)] concerned the issue of summonses by the Respondent in respect of Mr Lin's medical treatment in order to test the Applicants' submissions. The Respondent stated that documents produced under summons "ultimately showed" that the allegation that Mr Lin's medical treatment was the main reason the applicant spent so much time in China "was implausible". This evidence was not tested. Accordingly, I cannot find that the work involved in issuing the summonses and considering documents thereby obtained were special circumstances. 8. I again refer to McHugh J's findings extracted above. Section 60(3)(e) - whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance. 1. Submission [38] is to the effect that the Applicants' "failure to put on a reply and appear on the two hearing dates objectively showed that" the Applicants "had no intention of prosecuting the case (i.e. it was vexatious) and/or their case was not worth prosecuting" because of what the evidence showed. 2. It is not unusual for a party not to put on evidence and submissions in reply. I do not agree that a failure to do so necessarily involves proceedings which were frivolous or vexatious and/or their case was not worth prosecuting. I reject the Respondent's submission to that effect. 3. I have already commented on the failure to attend the 13 December hearing without providing evidence to explain that failure. 4. I observe that the Applicants offered to give telephone evidence from China and instructed both solicitors and counsel to represent them. The Respondent has provided no authority to support its submission and I am not satisfied that the evidence before me is sufficient to enable me to find that the proceedings were frivolous or vexatious. 5. The submission at [38] included the allegation that the Review Application was "misconceived or lacking in substance". I refer to my above comments in respect of the decision in Lai Qin and reject the Respondent's submission. Section 60(3)(f) - whether a party has refused or failed to comply with the duty imposed by s 36(3). 1. In considering the application of s 60(3)(f) it is necessary to consider the objects of the CAT Act as well as the terms of s 36(3). 2. The objects are found in s 3 which relevantly states: 3 Objects of Act The objects of this Act are: … (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. In BHR and BHS v Biripi Aboriginal Children's Services (No 2) [2015] NSWCATAD 109 the appeal panel of the Tribunal set out the context in which the Tribunal functions when exercising any power given to it by either the CAT Act or the procedural rules or when interpreting any provision of the Act or those rules, as follows: 7 Section 36(1) of the [CAT Act] sets out the "guiding principle" for the Act and the procedural rules, in their application to proceedings in the Tribunal. These are to facilitate the just, quick and cheap resolution of the real issues in the proceedings. 8 Subsection 36(3) of the [CAT Act] sets out the persons who are to co-operate with the Tribunal to give effect to the above guiding principles. That subsection is in the following term: (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. 1. With respect, I concur with the principle enunciated by the Tribunal when considering applications for costs by both parties in Karina Boscolo (Applicant); Axciom Australia Pty Limited (Respondent) [2015] NSWCATAD 28: 18 The Tribunal's understanding of the interaction of [ss 3 and 36 of the CAT Act] is that both the parties and their representatives and the Tribunal itself have an obligation in their conduct to act with economy and to focus on the primary issues between the parties. 1. RS [39(a)] submits that the Applicants failed to "file and serve their evidence and submissions and appear at the two hearings in accordance with the Tribunal's directions" 2. As to "evidence and submissions", the fact is that the Applicants provided evidence and submissions in support of their Revenue Application, albeit late, but did not provide evidence or submissions in reply to the Respondent's evidence and submissions. I noted above that it is not unusual for a party not to put on evidence and submissions in reply. I do not agree that a failure to do so necessarily involves special circumstances, let alone special circumstances warranting an award of costs. The Respondent has provided no authority to that effect. Indeed, it may well be that such a failure by a party merely strengthens its opponent's case. 3. Section 36 (3) states that each party to proceedings in the Tribunal and each Australian legal practitioner or other person representing a party in such proceedings "is under a duty to co-operate with the Tribunal … and to comply with the directions and orders of the Tribunal." 4. I find that the multiple failures by the Applicants to file and serve their evidence and submissions in chief in accordance with multiple timetables having been made by the Tribunal at the request of both parties is contrary to s 36(3). 5. Also, I find that the unsubstantiated failure by the Applicants to appear at the 13 December hearing is itself a failure to comply with the duty imposed by s 36(3) which necessarily leads to a finding that the Applicants failed to comply with s 60(3)(f). 6. Having regard to my above findings, the circumstances set out in the above chronology including the repeated failure by the Applicants to provide timely instructions to their solicitors "to facilitate the just, quick and cheap resolution of the real issues in the proceedings", I find that there are special circumstances for the purpose of s 60(2). 7. I find that there are not merely one or two isolated incidents in which the Applicants failed to comply with the duty to prosecute their case. I have regard to the events from the directions made by the Tribunal on 13 December 2016 with the Applicants' consent, to the Applicants' failure to attend the hearing on 13 December 2017 and the notification that they would not attend, not being provided to the Respondent's solicitors until 4:12 pm on 12 December 2017 with no notification to the Tribunal until the proceedings commenced on 13 December. The Applicants were well aware that they had agreed that their failure to attend the hearing in person would lead to the dismissal of the Review Application. The Applicants were represented by counsel and solicitor on 13 December 2017. However, no submissions were made on behalf of the Applicants on that occasion nor was any reasonable explanation of their failure to appear provided to the Tribunal. 8. I find that the matters outlined in the immediately preceding paragraph, together with multiple other occasions on which the Applicants failed to "facilitate the just, quick and cheap resolution of the real issues in the proceedings" amount to special circumstances which warrant an award of costs pursuant to s 60 (2). Section 60(3)(g) - any other matter that the Tribunal considers relevant. 1. Under the heading "Other relevant matters" the Respondent submits at [40] that special circumstances exist to award costs, including on an indemnity basis from 10 May 2017, because if the applicant had accepted the Respondent's settlement offers or made "realistic counter-offers" it would have saved the Respondent substantial costs in bringing the matter to a conclusion as early as 10 May 2017 and the Applicants would have been substantially better off because the dismissal of their case has the effect of confirming the Assessments. 2. The fact is that the failure by one party to accept settlement offers from another party to make what that other party calls "realistic counter-offers" appears frequently in the course of litigated disputes involving the Respondent. This is not out of the ordinary and does not constitute special circumstances within the meaning of s 60(2). I also refer to the above court and tribunal findings in that where a court or tribunal has not determined a substantive case on its merits it is not the function of the court or tribunal, on a costs application, to make a prediction as to the outcome of a hypothetical case. 3. Accordingly, I reject the Respondent's submissions at RS [40] as dealt with above. Indemnity costs 1. The Respondent has sought an order of costs on an indemnity basis from 10 May 2017. The Respondent again relied on: 40 … had the Applicants accepted the Respondent's settlement offers or made realistic counter-offers: a. it would have saved the Respondent substantial costs in bringing the matter to a conclusion as early as 10 May 2017; and b. the Applicants would have been substantially better off, because the dismissal of their case has the effect of confirming all [relevant] land tax assessments for … [all years in dispute]. 1. There is no doubt that the rationale for the awarding of costs is that such an award is compensatory, not punitive. See A J Holdings at [12] which referred to "eMove at [37] citing Latoudis v Casey (1990) 170 CLR 534 at 543; Oshlack v Richmond River Council (1998) 193 CLR 72 at 97", and Ceepee at [10], 2. The Respondent's authorities for RS [40] were Calderbank v Calderbank [1975] 3 All ER 333 and Messiter v Hutchison (1987) 10 NSWLR 525 (Messiter) . The Respondent did not refer to any particular part or principle of either judgment in making the indemnity submission. 3. I observe that the Hon Justice Beazley AO, now President of the Court of Appeal, succinctly described Calderbank in the course of a paper she gave to Australian Lawyers Alliance in March 2008. Her Honour said: The issue in Calderbank v Calderbank was whether a party could in a 'without prejudice' communication in which an offer of settlement had been made, reserve that party's right to waive the confidential (that is, the 'without prejudice') nature of the offer in order to rely upon it for the purposes of making an application for indemnity costs. Cairns LJ held that that was permissible. …. [Calderbank] offers are commonplace and there is never an argument about whether the 'without prejudice' nature of the offer precludes reliance upon it for the purposes of costs. 1. Messiter involved a costs application before Rogers J, as he then was, in respect of a dispute concerning the value of a horse on a particular date. A written settlement offer had been made by the defendant. The offer was headed "without prejudice" and included words to the effect that the offeror intended to rely on making the offer if and when the question of costs arose and intended bringing the letter to the attention of the court in those circumstances. 2. In the course of his decision, His Honour noted that the offer was of a kind which in England had become known as a Calderbank letter. His Honour observed at page 529 that Calderbank letters had not previously been the subject of decision in New South Wales and even though no money had been paid into Court it seemed to him that there was "no reason why the Court should not foster all means whereby parties may properly attempt to dispose of their disputes prior to actual hearing". 3. Rogers J said at page 528: … at least as a matter of principle, a Calderbank letter should be permitted to be taken into account by the Court in determining whether a special order displacing that which generally obtains of costs following the event should be made … 1. I accept that the "without prejudice" nature of the Respondent's offers does not preclude reliance on those offers for the purpose of an indemnity costs application nor for displacing the usual "costs follows the event" order that is appropriate to the relevant jurisdiction. 2. However, pursuant to s 60(1), the primary rule in proceedings in the Administrative and Equal Opportunity Division of the Tribunal is that each party pays their own costs (Administrative and Equal Opportunity Division Guideline – Costs - August 2017), not that "costs follow the event". 3. As to submission [(40)(b)] I observe that other than, possibly in the Review Application, no evidence has been brought to the attention of the Tribunal as to whether the Applicants would or would not have been "substantially better off" had they accepted the Respondent's settlement offer. It is not appropriate for issues relevant to the substantive case to be hypothetically considered in these proceedings for the reasons noted above. 4. Given that costs do not follow the event in these proceedings, the Respondent has provided no relevant authority to the effect that it would be appropriate for an indemnity order to be made in his favour. 5. Conversely, the Applicants, in failing to make any submissions or provide any authority to dispute the Respondent's position, have provided no evidence or authority that it would be appropriate not to make an award of costs against them, whether indemnity costs or on a party-party basis. 6. My research indicates that no indemnity costs orders have been made in the Tribunal in matters involving the Respondent since the Tribunal commenced operation in January 2014. Research also indicates that in the ADT, one only award of costs was made on an indemnity basis in a matter involving the Respondent. The decision, by Block JM, in Peng v Chief Commissioner of State Revenue [2009] NSWADT 295 (Peng) was made in favour of the Chief Commissioner to the effect that the applicants in that matter were required to pay, on an indemnity basis, costs incurred by the Chief Commissioner from commencement of the proceedings as agreed or as assessed. 7. Peng involved a hearing over two days in respect of the Chief Commissioner's application for a costs award in respect of an application by the owners of a property that they should be allowed an exemption from land tax concerning their property, which they claimed was their principal place of residence. 8. The applicants in Peng withdrew their substantive application one working day immediately prior to the days scheduled to hear their application. The costs decision notes that there were a large bundle of documents before the Tribunal for the purpose of the costs hearing. Contrary to these proceedings, the documents in Peng included, by agreement between the parties, all affidavits filed by the parties in respect of the substantive proceedings and written submissions were furnished by each party. 9. In Peng the Chief Commissioner submitted at [7.5] that the applicants' conduct constituted … an `attempt to deceive' him and the Tribunal and that they are guilty of "gross and palpable falsehoods". 1. Block JM said: 15 There is moreover, a power available to the Tribunal in appropriate cases to award costs. That power is contained in section 88(1A) of the Administrative Decisions Tribunal Act [1997] (ADT Act) in the following terms: 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 (ii) failing to comply with this Act, the regulations, the rules of the Tribunal or any relevant provision of the enactment under which the Tribunal has jurisdiction in relation to the proceedings, or (iii) asking for an adjournment as a result of a failure referred to in subparagraph (i) or (ii), or (iv) Causing an adjournment, or (v) Attempting to deceive another party or the Tribunal, or (vi) Vexatiously conducting 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) Any other matter that the Tribunal considers relevant. Section 88 was amended by the Administrative Decisions Tribunal Amendment Bill 2008. Previously, section 88 was limited to "special circumstances" only for an award of costs. 1. There are obvious differences between s 88 of the former ADT Act and s 60 of the CAT Act. However, the primary rule in relation to costs, both Acts is that each party is to bear its own costs in proceedings before the relevant tribunal. 2. The reasons in Peng include an analysis of judicial authorities as to the circumstances under which courts could make a costs order without a trial. The authorities included: 1. the reasoning of McHugh J in Lai Qin extracted above; 2. Hill J at (201) in Australian Securities Commission v Aust-Home Investments Limited (1993) 44 FCR 194. His Honour said: It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a Court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial. This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue. 1. Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170 in which Mason CJ, Brennan, Deane and Gaudron JJ said at [171] that the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. 2. At [14] an explanation of the policy rationale as to "no order as to costs" in first instance administrative review matters by McClellan CJ at CL in Residents against Improper Development Incorporated and Another v Chase Property Investments Pty Ltd (2006) 149 LGERA 360 at [231] as follows: "The reason for such an approach is well known. It is accepted, in my view correctly, that where an individual or corporation believes that an administrative decision which affects it is unreasonable, it should not be discouraged from seeking to have the decision reviewed by a concern that it may have to pay the costs of the decision-maker (invariably a public body) if the application fails. This approach acknowledges the fact that the nature of the proceedings is a review of an administrative decision where, unless review is provided, an individual will have no means of challenging the decision, however unreasonable, except if the high threshold of Wednesdbury unreasonableness can be overcome. It is derived from considerations of fundamental fairness and seeks to strike an appropriate balance between the resources of the decision-maker and those of the citizen affected by its decision." The Chief Commissioner contends, and the Tribunal accepts, that a taxpayer with a barely or fairly arguable case should not be at risk as to costs. The Chief Commissioner contends (and the Tribunal agrees) that so much may be accepted, but the Tribunal also agrees that there is a significant difference between a weak case and one which proceeds on the basis of falsehood. 1. At [102] what Block JM referred to as: … the leading decision of Colgate Palmolive v Cusson (1993) 46 FCR 225 at 232-234 Sheppard J described the circumstances necessary for indemnity costs in the following terms: "it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud; evidence of particular misconduct that causes loss of time to the Court and to other parties; the fact that the proceedings were commenced or continued for some ulterior motive; or in wilful disregard of known facts or clearly established law; the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions;" 1. Block JM also said: 104 In Yates v Bola [2000] FCA 1895 at [73] and [74] the Full Federal Court considered an appeal from a decision of Branson J to award costs on an indemnity basis in connection with evidence that was false. Her Honour stated: The evidence called at trial showed both the plea and Mr Yates' affidavit evidence in this regard to be false, and that Mr Yates either knew or ought to have known that it was false. … The fact that the applicant persisted with the proceeding without apparent regard to significant deficiencies in the evidence available to be called to establish its case is sufficient, in my view, to enliven the discretion of the Court to make orders for costs on a basis other than a party and party basis. 105 The Full Court upheld the decision below and specifically referred to the finding that the false evidence was given negligently. Rather it was a finding that "the evidence was deliberately false or, at least, recklessly false" and accordingly "there can be no doubt that her Honour was correct in regarding that matter as relevant to the exercise of her discretion" to award indemnity cost 1. Having concluded his analysis of judicial authorities and of the evidence and submissions before him, Block JM's findings included: 109 The evidence before the Tribunal indicates a consistent history of deceit on the part of the Applicants. The property was not during the relevant years occupied by the Applicants as their PPR and they were altogether aware of the true position … 111 The essence of the submissions for the Applicants is that whatever their conduct an order for costs is not possible without a hearing. On this basis the argument must be that it is sufficient that the Applicants withdrew their applications. … The Tribunal does not agree that the facts are so complex that it is not possible to make a finding without a hearing; on the contrary the documents and letters submitted by the Applicants themselves setting out as they do the different versions make it clear that the Applicants have behaved in a manner which is deceitful. As stated previously in these reasons it was open to the Applicants to dispute the factual contentions contained in RS but they did not do so. 112 The conduct of the Applicants was deceitful as alleged in clause … and it was also in breach as alleged in clause … to such an extent that an order as to costs is clearly warranted and moreover it is proper that costs be awarded on an indemnity basis. 1. I observe that the Respondent's costs application in this matter is dealt with on the papers rather than pursuant to an oral hearing and that the Applicants chose not to provide evidence or make submissions opposing the Application, thus saving both costs and effort by the Respondent and the time of the Tribunal. 2. In the circumstances and having regard to the relevant authorities referred to above, I am not satisfied that an order should be made against the Applicants for indemnity costs. 3. However, having regard to my findings of fact, my consideration of RS and the authorities referred to above, and my analysis of the matters referred to in s 60(3) I am satisfied that the Applicants deliberately or recklessly engaged in a course of conduct which unnecessarily disadvantaged the Respondent and delayed the proceedings and was the antithesis of the Applicants' duty to co-operate with the Tribunal to give effect to the guiding principle of the CAT Act. 4. Accordingly, I am satisfied that there are special circumstances warranting an award of costs. 5. I find that the costs of the Respondent should be paid by the Applicants from 22 February 2017 (the day after which the Applicants first failed to comply with a direction of the Tribunal and sought an extension of time to the then current timetable). 6. In respect of the substantive proceedings, the Applicants' inappropriate course of conduct continued up to and including 13 December 2017 when both the Applicants failed to appear for the deferred hearing. Order 1. The decision of Tribunal is as follows: 1. The Applicants shall pay the Respondent's costs of the proceedings from 22 February 2017 to 13 December 2017 inclusive as agreed or failing agreement as assessed. ******** 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: 14 May 2018