Supreme Court New South Wales Medium Neutral Citation: Gaetani v Schiliro (No 2) [2019] NSWSC 533 Hearing dates: 9 March and 17 April 2018; 14 and 28 September 2018 (written submissions) Date of orders: 10 May 2019 Decision date: 10 May 2019 Jurisdiction: Common Law Before: Walton J Decision: No order as to costs. Catchwords: COSTS – courts powers as to costs – Uniform Civil Procedure Rules 2005 (NSW) r 42.1 – discretion as to costs – particular issues as to resolution of an appeal – further proceedings by proposed notice of motion – no order as to costs Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Powers of Attorney Act 2003 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Botany Municipal Council v Jackson (1985) 2 NSWLR 1 Broke Hills Estate Pty Ltd v Oakvale Wines Pty Ltd (2005) 23 ACLC 1266; [2005] NSWSC 638 Gaetani v Schiliro [2018] NSWSC 1279 Moseley v AB (No 2) [2017] NSWSC 1812 Category: Costs Parties: Gaetana Gaetani (First Plaintiff) Ysabell Schiliro (Second Plaintiff) Barbara Schiliro (Defendant) Representation: Counsel: M Condon SC (Plaintiffs) J Whitfield (Defendant) Solicitors: Fox & Staniland Lawyers (Plaintiffs) Whitefield Solicitors (Defendant) File Number(s): 2017/266467 Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Guardianship Division Date of Decision: 25 September 2017 Before: S M Roberts, Senior MemberE Safro, Senior MemberD R Sword, General Member File Number(s): NCAT 201700196931 Judgment 1. HIS HONOUR: On 22 August 2017, S M Roberts, E Safro and D R Sword, three members of the New South Wales Civil and Administrative Tribunal ("the Tribunal") determined an application with respect to a review of an enduring power of attorney and a guardianship application by making the following directions: 001: Review of an Enduring Power of Attorney 1. The hearing is adjourned to 14 September 2017 at 2.00pm part-heard. NCAT Civil Tower, Level 17, Room 17.3, 66 Goulburn Street, SYDNEY NSW 2000. 2. The Tribunal makes the following directions: Mrs Gaetana Gaetani, in her capacity as: (a) a director of Breeza & Associates Pty Ltd; (b) a director of Enrico Nitti Holdings Australia Pty Ltd; and (c) a director of Orberg Holdings Pty Ltd; is to facilitate the provision by 5 September 2017 to the Tribunal (and serve on the other parties) financial statements (including bank statements) for the period 1 July 2012 to the present of Breeza & Associates Pty Ltd; Enrico Nitti Holdings Australia Pty Ltd and Orberg Holdings Pty Ltd. 3. The Tribunal makes the following directions: (a) Pursuant to subsections 46(1)(a) and 46(2)(a) of the Civil and Administrative Tribunal Act 2013 (NSW), the Tribunal requests the attendance of Mr Muratore Orazio (in his capacity as director of Leichhardt Property Developments Pty Ltd) at the Tribunal's hearing on 14 September 2017 at 2.00pm at NCAT Civic Tower, Level 17, Room 17.3, 66 Goulburn Street, SYDNEY NSW 2000 to give evidence as to the financial affairs of Leichhardt Property Developments Pty Ltd. 002: Guardianship Application 1. The hearing is adjourned to 16 September 2017 at 2.00pm part-heard. NCAT Civic Tower, Level 17, Room 17.3, 66 Goulburn Street, SYDNEY NSW 2000. (Those directions, which represent the amended directions made, shall be hereafter referred to as "the directions"). 1. By an amended summons filed 23 November 2017 ("the amended summons"), an appeal was brought by Mrs Gaetana Gaetani and Mrs Ysabell Schiliro (collectively, "the plaintiffs"), pursuant to Pt 14 of Sch 6 of the Civil and Administrative Tribunal Act 2013 (NSW). The defendant was Ms Barbara Schiliro ("the defendant"). The following orders were sought: 1. An order pursuant to Pt 14 of Sch 6 of the Civil and Administrative Tribunal Act 2013 (NSW), to the extent necessary, granting leave to appeal from the whole of the decision of the NSW Civil and Administrative Tribunal made on 22 August 2017 ("the decision"). 2. An order setting aside the decision. 3. An order pursuant to s 69 of the Supreme Court Act 1970 (NSW) quashing the decision on the basis of jurisdictional error. 4. Such further or other order as the Court thinks fit. 5. Costs. 1. During the course of the hearing of the appeal on 9 March 2018, an issue was raised by the Court as to whether the directions imposed a legal obligation. Both parties conceded (in one way or another) that they did not. In the result, the plaintiffs sought leave to further amend their amended summons in order to seek a declaration to the effect that they had no such obligation. 2. The Court intimated that, based on the submissions of the parties, it was prepared to grant the amendment and make the orders sought therein. This step ultimately resulted in consent orders being made in the following form: 1. The Court grants leave to the plaintiffs to amend the Amended Summons in the form annexed hereto marked "A". The plaintiffs shall file the further amended summons. 2. The Court declares that on the true construction of paragraphs 2 and 3 where they twice appear on pages 10 – 11 of the Court Book that no legal obligation thereby exists on the parties nominated therein to do anything stated in those paragraphs. 3. The Court notes that the declaration in paragraph 2 does not affect or limit the first plaintiff's obligations as attorney for her father. 4. Costs reserved. 5. The Court adjourns the matter for mention to facilitate such application the parties may make in relation to the further conduct of the proceedings in the Civil & Administrative Tribunal on Tuesday, 24 April 2018 at 9.30am. 6. Further amended summons otherwise dismissed. (Those orders shall be hereafter referred to as "the orders" – it should also be noted that the date in order 5 was vacated, following email correspondence with the parties with respect to the Court's criminal listings on that same date, and re-listed on 17 May 2018 at 9.30am). 1. Upon the matter bring returned on 17 May 2018, two outstanding issues remained as follows: 1. whether the proceedings before the Court should be determined conclusively by the making of consent orders, subject only to the question of costs; or 2. whether the proceedings should proceed in the Equity Division of the Supreme Court, namely, the Protective List of Lindsay J (again, with the question of costs requiring resolution). 1. To facilitate the disposition of those issues a procedure was adopted whereby the plaintiff would produce a draft notice of motion ("the draft motion"). By the draft motion (not being formally before the Court) the plaintiff proposed to seek, inter alia, leave to serve a further amended summons, foreshadowing the orders which would be sought in the Equity Division of the Court and staying the extant proceedings before the Tribunal. 2. No further submissions were received, save for a submission from the defendant opposing time to file the draft motion in apparent misunderstanding of the procedure adopted. 3. On 17 August 2018, the Court gave judgment in relation to those issues: Gaetani v Schiliro [2018] NSWSC 1279 ("Gaetani v Schiliro No 1"). 4. In Gaetani v Schiliro No 1, the Court reached the following conclusions as to the disposition of the matter: [10] Having reviewed the material, [which included a draft notice of motion seeking, inter alia, leave to serve a further amended summons, foreshadowing the orders which would be sought in the Equity Division of the Court and staying the extant proceedings before the Tribunal (see Gaetani v Schiliro No 1 at [8])] I consider that the appropriate course is to treat the existing proceedings constituting an appeal from the Tribunal as spent, save as to the issues of cost, so as to permit the Tribunal to determine the extant proceedings before it (noting there is no issue as to its jurisdiction to do so). [11] No ruling is made with respect to the draft motion which is strictly not before the Court other than as an indication as to a foreshadowed course. Nothing in this ruling is intended to be conclusive of any fresh steps which may be taken by the plaintiffs in this Court. [12] As to the question of costs, and as per the agreement of the parties, the question will be determined on the papers, save as to any application for an oral hearing, with each party providing written submissions with respect to the same. As the debate has gravitated towards the defendant seeking costs the following directions are predicated on that basis. No other orders would seem to be necessary in the disposition of the appeal itself having regard to order 6 as extracted in [6] above. If either party, however, considers that a further step is necessary in that respect they should indicate the same in their written submissions. 1. The Court made the following directions (at [13]): [13] The Court makes the following directions: (1) The defendant shall file and serve written submissions with respect to costs within 14 days of the publication of this decision; and (2) The plaintiffs shall file and serve written submissions with respect to the same within 14 days of receipt of the submissions referred to in (1). (3) The matter may be listed for further oral submissions upon application by either party in their written submissions filed in accordance with these directions or if that course is considered appropriate by the Court. (4) In the absence of an application pursuant to (3), the issue of costs will be determined upon the written submissions and without further oral submissions before the Court. 1. This judgment concerns the remaining issue in the proceedings, namely, the issue of costs. SUBMISSIONS OF THE PARTIES 1. On 31 August 2018, the defendant provided written submissions as to costs (subsequently filed on 28 September 2018). Those submissions are short and are extracted below: 1. It is submitted that the defendant is entitled to costs in accordance with Rule 42.1 of the UCPR, as the plaintiff[s] appeal to the Supreme Court was dismissed. The Plaintiff[s] it is submitted had no right to appeal as is detailed in the rationale in 6 below. Rule 42.1 of UCPR states that the general rule is that 'costs follow the event' unless it appears to the court that some other order should be made as to the whole or any part of the costs. 2. Whilst the Defendant acknowledges that the court has a discretion in ordering cost orders, there is a rebuttable presumption that the costs will follow the event. This was an established principle held by the Court of Appeal in Laguillo v Haden Engineering Pty Ltd [1978] 1 NSWLR 306. 3. The Defendant respectfully submits that the Plaintiff[s] were unsuccessful in their Appeal and the defendant has successfully defended the Plaintiff's summons. Therefore, the defendant has a reasonable expectation of obtaining an order for the payment of her costs because the defendant was inconvenienced by the Plaintiff[s] bringing this proceeding which has no merit and it is just and reasonable that the plaintiff[s] should reimburse the defendant for liability for costs which have been incurred in defending the matter. This is based on a general law position as established in Oshlack v Richmond River Council (1998) 193 CLR 72 'that a successful party has a "reasonable expectation" of being awarded costs against the unsuccessful party'. 4. The presumption that 'cost follow the event' will only be displaced where there has been some sort of disentitling conduct on the part of the successful party [Oshlack v Richmond River Council (1998) 193 CLR 72]. The defendant submits that there has been no disentitling conduct on the part of the defendant in these proceedings or no conduct which would vitiate their entitlement to costs. In the absence of such conduct on the part of the defendant, the non-awarding of a cost order in favour of the defendant is unjust and unreasonable and contrary to the general approach adopted by the court in civil proceedings. 5. The defendant further submits that the court is to order costs in accordance with the outcome of the proceedings as a whole without attempting to differentiate between particular issues on which the party may not have succeeded: Bostick Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38]. Whilst the defendant acknowledges that the Court may make a different order if the plaintiff[s], the losing party in this proceeding succeeds on significant issues, it is the defendant's submission that the plaintiff[s] ha[ve] not succeeded at all and in fact had no right to appeal. In view of the above, the defendant should not be prejudiced and should be awarded cost orders. 6. The rationale and further reasons that the appeal should fail and be dismissed and thus for payment of the Defendant's costs by the Plaintiff[s] are as follows: a) The Plaintiffs abandoned their first ground of jurisdictional error on the day before the hearing on 17 May 2018 (Plaintiff[s] written submissions point 16). By abandoning this critical point of appeal, it falls on the Appellant to identify what error of law or principle the NCAT has directed (or ordered) for an appeal 'as of right' to lie to the Supreme Court. The abandonment on the eve of the case does not assist the Plaintiff[s] if it is to be argued by them in any consideration of a cost order as the Plaintiff[s] have acted unreasonably and without any right to bring these proceedings as is detailed below in this submission. b) The fact that the Plaintiff[s] identified the 'informal request' of the NCAT directed to the Plaintiff (Mrs. Gaetani) and the associated entities (Companies) is of 'no legal effect' does not reach that important threshold. In fact, if Mrs. Gaetani were minded (as she is now) not to hand the NCAT the required documents, only an internal Appeal of the NCAT could (and should) have resolved that impasse. c) At the hearing of the NCAT on 22/8/2017 (page 244 of White Appeal book at line 12) Mr. Cameron of the Plaintiff was present and acting in the capacity of a McKenzie Friend when he addressed the Legal Member (Roberts) with advice for how the information from the various related companies to Schiliro 'could be obtained' by the NCAT. At page 245 of White Appeal Book at line 42. Mr. Cameron suggests that the related companies could pass 'resolutions' to make this information available, when in reality no such requirement was necessary. Furthermore, at page 249 of the White Appeal Book at line 25 Member (Roberts) is discussing with the Plaintiff the requirement to produce the required documents of the related companies and at line 35 the Plaintiff clearly understands the direction and she voluntarily accedes to the request by clarifying: MS Gaetani : "So I've got to provide the documentation seven days before the Tribunal ...? Ms Roberts : Yes. d) Why did the Plaintiff at first instance agree to provide the documentation (without being compelled under s48 of the NCAT Act) and then launch an appeal to this Court seeking to not have to provide them? It can only be viewed as an abuse of process and a very unnecessary delay to the NCAT completing its investigation into the Power of Attorney. The Plaintiff[s] have made request to the Court to agitate a notice of motion before this court seeking "an opinion" of the Court with respect to allegations the Plaintiff[s] failed to raise at the NCAT when it is looking into these very matters on behalf of Mr. Luigi Schiliro (the protected person). The proper course would be to remit the matter back to the NCAT whereby the Plaintiff[s] may raise these issues with the relevant members undertaking the inquiry. e) Under section 38 (1), (2) of the Civil and Administrative Tribunal Act 2013, the NCAT (unlike the Supreme Court) has very wide powers that: (2) The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice. f) The current proceeding brought by the Plaintiff[s] before this court is nothing other than an attempt by the Plaintiff[s] to try usurp the very wide powers of the NCAT, in determining if it will conduct a review of the Power of Attorney of Luigi Schiliro under s36 of the Power Of Attorney Act. g) The NCAT has not been able to sufficiently inform itself of important documents which could prove or disprove the concerns of the Defendant. The NCAT has sought documents of Companies which are DIRECTLY related to Mr. Luigi Schiliro. h) Unless the Plaintiff[s] can identify a "question of law" tied to a question of legal principle (as discussed by Lindsay J in C v W [2015] NSWSC 1774) with absolute specificity there exists no right to make an appeal to the Supreme Court. i) The Plaintiffs have thus far not identified any error of law of the kind that would permit them to make any application in the Protective Division of the Supreme Court to have the matter remain in this jurisdiction. j) The Plaintiffs have a further problem, whilst the alleged declaration was sought and given by the Court on 17 May 2018, albeit with consent but reservations from the defendant, saying that the "order" or "decision" of the NCAT lacked "legal effect" as worded, it is respectfully submitted the Plaintiff[s] were not even entitled to this. If the Order or Decision was "invalid" as the Plaintiff[s] assert, their immediate remedy was an internal Appeal panel of the NCAT seeking clarification, advice and/or rectification of the order to comply with current procedural requirements. The NCAT may have also exercised its powers under section 48 of the Act to issue a summons to the associated company entities addressed to its proper officer. k) Furthermore, there are in place procedural directions which are issued by the President of the NCAT (a Judge of the Supreme Court) and which are binding on the Tribunal, the parties and their representatives as is clearly stated in s 26(4) of the Act. Four NCAT-wide procedural directions have been made and published: (a) Service and giving notice – Procedural Direction 1 (b) Summonses – Procedural Direction 2 (c) Expert witnesses – Procedural Direction 3 (d) Registrars' power – Procedural Direction 4 l) NCAT Procedural Direction 2 No. 15 (b) sets out clearly that the NCAT can serve a notice (summons) on a corporation to its proper officer. And in No. 21 also sets out how delivery on that Corporation is to be carried out. (b) If a corporation, state the corporation's full name (including for example "Ltd" or "Pty Ltd" as the case may be) followed by the words "by its proper officer"; m) The Plaintiffs have pursued a course of action which is unwarranted and certainly not in accordance with the procedures as set out in the relevant parts of the Act or the Procedural Directions. n) The proposed application by the Plaintiff[s] to keep the matter before the Supreme Court is gross misuse of power, unwarranted and not in accordance with the spirit, capacity or remit of the NCAT as described by the Parliament in seeking for the Tribunal to deliberate in a cheap, quick and efficient manner informing itself of matters it feels necessary to determine the facts in issue. o) To confirm this proper understanding of the functions of the NCAT, one need look no further than the erudite observations of Lindsay J in C v W at [30] – [40] which deal with these very issues in contention: [30] Section 5(2) is to the effect that a decision of the Tribunal that purports to be made under enabling legislation or the Civil and Administrative Tribunal Act is taken to be a decision under that legislation or the Act (as the case may be) even if the decision was beyond the power of the decision-maker to make. [31] Section 34 provides, inter alia, that the Court can, but is not required, to refuse to conduct a judicial review of a decision of the Tribunal "if an internal appeal [to an Appeal Panel of the Tribunal] or an appeal to a court could be, or has been, lodged against the decision". [32] Sections 53(3)-(4) provide that if a provision of the Civil and Administrative Tribunal Act, or "procedural rules" is not complied with in relation to the commencement or conduct of proceedings, the failure to comply is to be treated as an irregularity and does not nullify the proceedings or any decision in the proceedings unless the Tribunal otherwise determines; and the Tribunal may, in dealing with any such irregularity, wholly or partly set aside the proceedings or a decision in the proceedings. [36] What is meant by the expression "a question of law" cannot be stated exhaustively; but, by sidelining the question whether a defective decision is void or voidable, sections 5(2), 34 and 53(3)-(4) allow the grounds upon which a decision may be attacked to become the focus of attention within the framework of an appeal procedure that facilitates a constructive outcome tailored to the needs of the particular case, not constrained by an all or nothing remedial response. [37] Taken together, sections 5(2), 34 and 53(3)-(4) have the effect of integrating the decision-making processes of NCAT with those of the Court's hierarchy of appeals, subject to procedural filters built-in to "rights" of appeal, designed to ensure that the jurisdiction of the Court is generally able to be invoked only in cases involving questions of principle, leaving the determination of routine cases, and ordinary factual disputes, to the Tribunal established by Parliament for that purpose. [40] The Civil and Administrative Tribunal Act does not oust the jurisdiction of the Court to grant administrative law remedies, but confers rights of appeal that enable the Court to supervise the work of NCAT by focusing principally upon questions of principle. The primary way this is done is by the grant of an appeal "as of right" limited to a "question of law", absent a grant of "leave" by the Court for an appeal on any other ground: Schedule 6, clause 14(1)(b). 7. The defendant raised inter alia in her initial submissions before the Court on the hearing the arguments that support the cost order in favour of the Defendant. 8. The Defendants urge the court for these proceedings be remitted back to the NCAT for further consideration by the Tribunal forthwith. 1. The plaintiffs filed a short submission as to costs on 14 September 2018. Those submissions are extracted below: 1. The plaintiff submits that the defendant pay her costs of the appeal. 2. The appeal was resolved upon the Court observing that the Tribunal had made no decision, or order that could found an appeal. The defendant took no such point in opposition to the appeal. On the contrary, she submitted that the Tribunal had made a decision (paragraph 1 of her outline of submissions), that the Tribunal had made directions 'which it was entitled to do' (paragraph 2) and that the Tribunal made the 'correct Interim order requiring the plaintiff to produce the relevant documents' (paragraph 23; the emphasis is added). By way of conclusion, the defendant submitted that the 'court should dismiss the Appeal with costs and uphold the interim direction of the NCAT requiring the plaintiff to furnish the NCAT with the relevant documents it seeks' (paragraph 28; again, the emphasis is added). 3. The defendant never contended that the directions issued by the Tribunal imposed no legal obligation (cf Gaetani v Schiliro [2018] NSWSC 1279 at [5]) and that, to that extent, the appeal was incompetent. She contended that the direction had legal consequence. 4. Had the defendant advanced the contention which the Court pointed to at an early point, then the appeal would not have proceeded. The Court can infer that the plaintiff would, on that hypothesis, have sought, and obtained, the declaration ultimately made pursuant to her amended summons. The appeal would, in that event, have had no practical content. 5. It is wrong to speak, as the defendant does, of presumptions when it comes to costs. UCPR r 42.1 stipulates a starting point, but qualifies that position by contemplating a different order. As Campbell J (as his Honour was) said, the ultimate decision as to costs must be made by reference to the facts of the individual case: Mid-City Skin Cancer and Laser Centre v Zahedi-Anarak [2006] NSWSC 1149 at [52]. Paragraph 4 of the defendant's submissions does not reflect the correct position. 6. It has long been established that a party may be deprived of its costs if, for example it succeeds on an appeal on a point not taken below (see, for example, George Hudson Ltd v The Australian Timber Workers' Union (1923) 32 CLR 413, at p. 426, Benjamin v Currie [1958] VR 259 at 264 and Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd; Carelli v Fs Architects Pty Ltd [2008] NSWCA 39 at [123]). In Whitehouse Properties Pty Limited v Bond Brewing (NSW) Limited (1992) 28 NSWLR 17, the successful appellant was not awarded its costs where it succeeded on a ground not argued in the court below and referred to obliquely in the appellant's written submissions but not developed either there or in oral argument. In Botany Municipal Council v Jackson (1985) 2 NSWLR 1 at 22-23 Priestley JA noted that: If the respondent were to succeed only on a point not taken until the argument before us was underway, questions could arise as to the proper costs order (see Papadopoulos v Tesseris (Court of Appeal, 16 March 1977, unreported). 7. Again, in Broke Hills Estate Pty Ltd v Oakvale Wines Pty Ltd [2005] NSWSC 638; (2005) 23 ACLC 1266 Gzell J declined to order costs in favour of the successful party when the issue it won on was arose in discussion between the Bench and the Bar table: see [33]. 8. Again, White J (as his Honour was) said in Bonic v Pacific General Security Limited [2009] NSWSC 1221 at [14]: "A successful defendant may also be deprived of some or all of his costs if the grounds of defence upon which he succeeds are raised late (eg Capolingua v Phylum Pty Ltd (1991) 5 WAR 137; Monier Ltd v Metalwork Tiling Co of Aust Ltd (No 2) (1987) 43 SASR 588)." The position must be all the more compelling where the successful defendant does not even raise the point which is dispositive of the litigation. 9. Underlying such cases is the proposition that a successful party should not be entitled to its costs if it itself has incurred costs unnecessarily. That principle informs provisions such as Civil Procedure Act, s 57. 10. Further, UCPR r 50.16A states: (1) A defendant who objects to the competency of an appeal must, by notice of motion filed and served on all other parties to the appeal within 14 days after service on the defendant of the notice of appeal, apply to the court for an order dismissing the appeal as incompetent. (2) If the defendant fails to comply with subrule (1) and the appeal is nevertheless dismissed as incompetent: (a) the defendant is not entitled to costs of the appeal unless the court otherwise orders, and (b) the court may order the defendant to pay the plaintiff any costs of the appeal proving useless or unnecessary. 11. The defendant's consent to the declaration made by the court implicitly recognises that the appeal was incompetent. The appeal was in respect to the Tribunal's decision of 22 August 2017 and the only relevant order made on that occasion was order 2 (CB 183), being the very order which the Court found imposed no legal obligation. The defendant did not file a motion of the kind contemplated by UCPR r 50.16A(1). The defendant should pay the plaintiff's costs of the appeal, because she could have, and should have, informed the plaintiff that she (the plaintiff) was not obliged to comply with the purported direction and would not insist upon it. The consequences would have been as referred to in paragraph 4 above. 12. Further, a fair reading of the defendant's submissions is that they addressed topics far removed from the issue ultimately found to be dispositive of the appeal, and from the issues canvassed by the plaintiff in her submissions. Costs were unnecessarily incurred by the plaintiff in considering them. 13. Alternatively, the plaintiff submits that there should be no order as to costs to the intent that each party should bear her own costs. 1. The plaintiffs also made the following submissions in reply to the defendant's submissions: a. the contention advanced in paragraphs 6b and 6j- that Ms Gaetani should have brought an internal appeal- was not advanced before, and, is irrelevant to the present issue; b. the contentions advanced in paragraphs 6c-6g are, likewise irrelevant; indeed, they add weight to the submission that the defendant has unnecessarily incurred costs by making allegations such as abuse of process which have no proper foundation; c. the submission that Ms Gaetani volunteered to provide the documents (paragraphs 6c-6d) does not reflect what actually happened. Whilst some of the transcript for the hearing on 22 August 2017 has been lost (CB 240.40), it is tolerably clear that the Tribunal desired documents to be produced (CB 240.45-241.5) and what followed was merely a working out of the practicalities of producing documents; and d. the submissions recorded in paragraph 6n are, again, unfortunate. The contention that the proposed application is a gross misuse of power is unwarranted, and not justified by anything said by the Court in its judgment (Gaetani v Schiliro [2018] NSWSC 1279). The application sought relief which could properly be given by this Court. The submission corroborates a point relied upon by the plaintiff- another reason for denying the defendant her costs is her propensity to make submissions which are extraneous to the real issues in the case and unwarranted. THE LEGISLATION AND RULES 1. The powers of the Court as to costs are set out in s 98 of the Civil Procedure Act 2005 (NSW) in the following terms: 98 Courts powers as to costs (1) Subject to rules of court and to this or any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. (2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court. (3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings. (4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to: (a) costs up to, or from, a specified stage of the proceedings, or (b) a specified proportion of the assessed costs, or (c) a specified gross sum instead of assessed costs, or (d) such proportion of the assessed costs as does not exceed a specified amount. … 1. Part 42 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") sets out the rules with respect to costs. Rule 42.1 is extracted below: 42.1 General rule that costs follow the event Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs. GENERAL PRINCIPLES 1. Before turning to the question of costs in the context of the issues raised on the present application, I will address the general principles associated with costs orders. 2. The general principles, with respect to costs orders, were set out in Moseley v AB (No 2) [2017] NSWSC 1812 at [65]-[79], extracted below: [65] The court's primary task is to determine whether the facts of the case or specific costs provisions impact upon the court's jurisdiction to make costs orders. Unless there are statutory provisions to the contrary, the court's discretion to determine such issues is unfettered: Civil Procedure Act 2005 s 98(1) (extracted above at [59]). [66] The central and overriding principle in this regard is that of doing justice to the parties in each particular case. This involves a heavily contextual assessment that focuses upon the conduct of the litigation itself. A discretion exercised on grounds unconnected with the litigation, or on no grounds at all, is arbitrary or capricious rather than fair or just (see Peters v Peters (1907) 7 SR (NSW) 398 at 399 (per Street J); Cretazzo v Lombardi (1975) 13 SASR 4 at 11 (per Bray CJ); Scharer v Counting Instruments Ltd [1986] 1 WLR 615 at 621 (per Buckley LJ). [67] The discretion must be exercised judicially and "according to rules of reason and justice, not according to private opinion … or even benevolence … or sympathy": Williams v Lewer [1974] 2 NSWLR 91 at 95. [68] This discretion may be exercised whenever the circumstances warrant, having regard to the scope and purpose of the s 98 of the Civil Procedure Act: Oshlack v Richmond River Council (1998) 193 CLR 72; Hamod v State of NSW [2011] NSWCA 375 at [813]. However, the discretion must be exercised on a principled basis (see Smith v Sydney West Area Health Service (No 2) [2009] NSWCA 62 at [11]), and in accordance with the principles of proportionality: Civil Procedure Act s 60. [69] In Oshlack v Richmond River Council, McHugh J observed the discretion, whilst unfettered, is not to be applied without guidance or qualification (at [65]-[67]): The discretion must be exercised judicially [65] Although the statutory discretion is broadly stated, it is not unqualified. It clearly cannot be exercised capriciously. Importantly, the discretion must be exercised judicially in accordance with established principle and factors directly connected with the litigation. In this manner, the law has gradually developed principles to guide the proper exercise of the discretion and, in some cases, to highlight extraneous considerations which, if taken into account, will cause the exercise of the discretion to miscarry. Consistent with the aim of justice, the law could not have developed otherwise. As Mason CJ said in Latoudis it does not follow that any attempt to formulate a principle or a guideline according to which the discretion should be exercised would constitute a fetter upon the discretion not intended by the legislature. Indeed, a refusal to formulate a principle or guideline can only lead to exercises of discretion which are seen to be inconsistent, a result which would not have been contemplated by the legislature with any degree of equanimity. [66] By far the most important factor which courts have viewed as guiding the exercise of the costs discretion is the result of the litigation. A successful litigant is generally entitled to an award of costs. As Devlin J said in Smeaton Hanscomb & Co Ltd v Sassoon I Setty, Son & Co (No 2), when setting aside an arbitrator's costs award: the arbitrator is not directing his mind to one of the most, if not the most, important of the elements which ought to affect his discretion, namely the result of the case. Prima facie, a successful party is entitled to his costs. To deprive him of his costs or to require him to pay a part of the costs of the other side is an exceptional measure. The combined force of the sentiments recognised above by Mason CJ, regarding the need for consistency in order to avoid injustice, and by Devlin J, regarding the most significant factor affecting the costs discretion, provides the jurisprudential basis for the important principle commonly referred to as the "usual order as to costs". The usual order as to costs [67] The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation. [70] Equally, the "general rule" (or "usual order as to costs") does not amount to a fetter on the court's discretion. The terms of r 42.1, "unless it appears to the court that some other order should be made", clearly envisage that the court may, in its discretion, make a costs order other than one following the event. [71] The most common circumstance in which the general rule may be displaced is evidence of disentitling conduct on the part of the successful party: Oshlack v Richmond River Council at [40] and [69]; G R Vaughan (Holdings) Pty Ltd v Vogt [2006] NSWCA 263. The disentitling conduct does not necessarily need to amount to misconduct; it may simply be any conduct "calculated to occasion unnecessary expense": Lollis v Loulatzis (No 2) [2008] VSC 35 at [29]; Keddie v Foxall [1955] VLR 320 at 323–4. [72] In Commonwealth of Australia v Gretton [2008] NSWCA 117, Hodgson JA addressed the principles of fairness underlying the making of a costs order, which may at times warrant departure from the general rule (at [121]): [121] In my opinion, underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs. Costs follow the event generally because, if a plaintiff wins, the incurring of costs was the defendant's responsibility because the plaintiff was caused to incur costs by the defendant's failure otherwise to accord to the plaintiff that to which the plaintiff was entitled; while if a defendant wins, the defendant was caused to incur costs in resisting a claim for something to which the plaintiff was not entitled: cf Ohn v Walton (1995) 36 NSWLR 77 at 79 per Gleeson CJ. Departures from the general rule that costs follow the event are broadly based on a similar approach. [73] Further factors identified as relevant to informing judicial discretion were identified in Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) [2011] NSWCA 256 at [97]-[98] (per Campbell JA) (see also, Oshlack v Richmond River Council at [69] (McHugh J); and Ritter v Godfrey [1920] 2 KB 47). They include, but are not limited to, the following: (1) whether the successful party effectively invited the litigation; (2) whether the successful party unnecessarily protracted the proceedings (3) whether the successful party succeeded on a point not argued before a lower court; (4) whether the successful party prosecuted the matter solely for the purpose of increasing the costs recoverable; and (5) whether the successful party had obtained relief which the unsuccessful party had already offered in settlement of the dispute. [74] The onus lies on the losing party to establish a basis for any departure from the general rule: Waterman v Gerling (Costs) [2005] NSWSC 1111 at [10]. Only in an exceptional case would a successful party both be deprived of costs and also ordered to pay the opponent's costs: Arian v Nguyen (2001) 33 MVR 37. [75] The fact that the proceedings involve some public interest aspect does not, of itself, necessarily warrant departure from the general rule that costs follow the event: Oshlack v Richmond River Council at [90] (McHugh J); Re Kerry (No 2) [2012] NSWCA 194 at [13], [15]; CSR Ltd v Eddy (2005) 226 CLR 1. [76] Where there is a divergence of authority on a particular issue, this may be a factor, but in Rinehart v Welker (No 3) [2012] NSWCA 228 the importance of the subject matter did not provide a basis for refusing costs to the successful party in private litigation (at [15]). [77] The Court should, however, have careful regard to the facts of the case: EKO Investments Pty Limited v Austruc Constructions Ltd [2009] NSWSC 371 at [18]–[23]; Knight v Clifton [1971] Ch 700 at 725. [78] Additionally, in a case where there are multiple issues litigated, the Court may, in the exercise of its discretion, order that a successful party have only part of its costs. It may be appropriate to order that a successful party be deprived of costs or a portion of the costs if the matters upon which that party is unsuccessful took up a significant part of the trial, either by way of evidence or argument: see Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. [79] The appropriate starting point, nonetheless, remains the presumption under r 42.1, and the enquiry then becomes whether in the exercise of the court's discretion, the presumption should be displaced, or whether some other order is to be preferred. CONSIDERATION 1. Both the plaintiffs and the defendant seek costs of the appeal. 2. The proceedings before the Court concerned an appeal from a decision of the Tribunal made on 22 August 2017. The Tribunal made the directions extracted at [1] of this judgment. 3. The appeal was originally brought by an amended summons which contained five grounds of appeal. By the hearing of the matter the first ground was abandoned. At that juncture, the appeal turned upon various grounds challenging the directions including a ground which contended the Tribunal exceeded its jurisdiction under s 36 of the Powers of Attorney Act 2003 (NSW) in making the directions. Upon the hearing of the appeal leave was given to further amend the summons in the circumstances described above (see Gaetani v Schiliro No 1). 4. The defendant's written submissions on the appeal sought to sustain the orders. It was contended the Tribunal exercised its discretion to adjourn the proceeding to hear an application to replace an appointed Power of Attorney due to a "lack of information" and that it was entitled to make the order (interim in nature) to require the defendant to produce documents. The Court was invited to dismiss the appeal and uphold the "direction" to produce the documents. 5. The defendant was correct to submit that the appeal was dismissed and, in a strict sense the plaintiffs were unsuccessful in the appeal; each of those factors weigh in favour of the grant of costs to the defendant. 6. However, the actual operative order made by the Court by consent in the disposition of the appeal were, so far as dismissal of the appeal was concerned, in the following terms: "Further amended summons otherwise dismissed" (see at [4] above). The balance of the orders concerned a consent declaration that the directions had "no legal obligation". 7. Without detracting from the extracts of the defendant's submission set out above and for the purpose of further distilling the issues as to cost, it may observed the defendant contended that the plaintiffs had no right to appeal and that this was not a case where the losing party had succeeded in making good hypothetical issues (and, in fact, the plaintiffs had succeeded in none) because: 1. The plaintiffs had abandoned ground 1 of the appeal in the further amended summons. By abandoning that ground, the appeal was no longer an appeal as of right. 2. The fact that the plaintiffs identified the orders had no legal effect did not reach that "important threshold". 3. The plaintiffs voluntarily acceded to the request for the documents (in the course of a discussion as to how the documents may be obtained before the Tribunal). 4. The Tribunal had very wide powers and had not been able to sufficiently inform itself as to the issues before it. 5. There was no right to appeal and the plaintiffs had not identified any error of law which would permit them to make an application to the Protective Division of this Court. 6. Notwithstanding consent the orders made in the disposition of the appeal, the plaintiffs were "not even entitled to this" – if the orders were invalid, an internal appeal in NCAT was available. Further, various other directions having been made by the "President of NCAT" meant the Tribunal could serve a summons on a corporation for production of documents (although the significance of this fact was not made clear). 7. The course of action taken by the plaintiffs was unwarranted and the proposed application to keep the matter before this Court would constitute a misuse of power. 1. There are some significant difficulties with those contentions (and various other particular submissions advanced by the defendant in favour of a grant of costs to the defendant for the following reasons: 1. The appeal was resolved upon an issue raised by the Court and the discussions between the Court and parties resulting in consent orders: Broke Hills Estate Pty Ltd v Oakvale Wines Pty Ltd (2005) 23 ACLC 1266; [2005] NSWSC 638 at [33]. The defendant did not raise the point that was dispositive of the appeal. 2. The defendant did not contend the orders created no legal obligation (and, in fact, contended to the contrary). It follows that the defendant "succeeded" upon a ground it did not advance in written or oral submissions on the appeal: see for example, Botany Municipal Council v Jackson (1985) 2 NSWLR 1 at 22-23 (per Priestley JA). 3. The defendant did not argue the appeal was incompetent even though, as the plaintiffs correctly submitted, consent to the declaration in the orders implicitly recognised the appeal was incompetent. The defendant's reliance on r 50.16A of the UCPR is appropriate. 4. It is far too late for the defendant to submit that the plaintiffs were not entitled to a declaration where the issues associated with the appeal and the declaration were fully canvased with the legal representatives of the parties and consent given by the defendant. 5. The defendant's submissions para 6(b)-(h) as extracted in [12] of this judgment do not assist the defendant in its application for costs when those issues are viewed in the light of (1)-(4) above. Further, some of those submissions were not previously advanced in the proceeding (before submissions made by the defendant on costs – see, for example, para 6(b) and (j) as extracted in [12] above) or the contentions are doubtful (with respect to the submissions in para 6(c) and (d) as extracted in [12] above, accepting that some transcript of the Tribunal proceedings is missing, it would appear the Tribunal sought the document in question and the discussion concerned the means of achieving that end). 1. On the other hand, there are factors weighing against the grant of costs in favour of the plaintiff. Ultimately, the plaintiff wholly abandoned the amended summons in the light of absence of the directions of the Tribunal creating no legal obligation, and, in a strict sense, the plaintiff was unsuccessful in the appeal. Further, costs were incurred in relation to the matters giving rise to the judgment in Gaetani v Schiliro No 1 which resulted in conclusions adverse to the approach proffered by the plaintiff (although, in that respect, I would not characterise the plaintiffs further application in the way the defendant did in written submissions). 2. The balancing of those considerations with the aforementioned principles and having regard to the provisions of UCPR r 42.1, it is appropriate in order to achieve a fair and just outcome, that each of the parties bear their own costs. 3. In the result, the Court orders there shall be no order as to costs. ********** 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: 10 May 2019