Supreme Court New South Wales Medium Neutral Citation: Webber v Racing New South Wales (No 2) [2019] NSWSC 627 Hearing dates: 28 May 2019 Decision date: 28 May 2019 Jurisdiction: Common Law Before: McCallum J Decision: The defendants are to pay the plaintiff's costs of the proceedings; that after 30 June 2017 those costs be assessed on the indemnity basis; that the costs order made by Latham J on 30 June 2017 be vacated. Catchwords: COSTS – basis for assessment – Court's discretion – whether it was unreasonable for the defendants to have subjected the plaintiff to the expenditure of costs in the proceedings – where defendants made concession as to jurisdictional error shortly before hearing and after strongly-contested interlocutory steps – defendants' behaviour towards plaintiff in proceedings characterised as unhandsome Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) rr 17.7, 36.16(3), 59.7 Cases Cited: In the Matter of Indoor Climate Technologies Pty Ltd [2019] NSWSC 356 Webber v Racing New South Wales [2017] NSWSC 687 Webber v Racing New South Wales [2019] NSWSC 46 Webber v Racing New South Wales (Supreme Court (NSW), Latham J, 30 June 2017, unrep) Category: Costs Parties: Pam Anne Marie Webber (plaintiff) Racing New South Wales (first defendant) Peter N V'landys (second defendant) Representation: Counsel: V Heath (plaintiff) ATS Dawson SC (defendants) Solicitors: Stacks Goudkamp (plaintiff) Racing New South Wales (defendants) File Number(s): 2016/362162 Publication restriction: None Judgment 1. HER HONOUR: The plaintiff in these proceedings sought judicial review of a decision of Racing New South Wales, or Mr V'landys, its Chief Executive Officer, refusing to renew her thoroughbred trainer's licence. 2. I gave judgment in the proceedings on 6 February 2019: see Webber v Racing New South Wales [2019] NSWSC 46. Upon publication of that judgment, I noted that during the hearing the plaintiff had foreshadowed seeking certain costs orders. I indicated that I would hear the parties as to those foreshadowed orders and that I would call on Racing New South Wales to address first on those issues. In those circumstances the defendants have referred to the orders as the "show cause orders". The issues raised are as follows: 1. why the defendants should not be ordered to pay the costs of the proceedings on an indemnity basis; and 2. why the Court should not vacate a costs order made by Latham J on 30 June 2017: see Webber v Racing New South Wales (Supreme Court (NSW), Latham J, 30 June 2017, unrep). 1. The circumstances in which those orders were foreshadowed by the plaintiff were addressed in my judgment, particularly at [4] to [16]. In particular, I noted that, shortly prior to the commencement of the hearing before me, the defendants had made a concession that Ms Webber was denied procedural fairness in the making of the decision refusing to renew her trainer's licence. As I also recorded in the judgment, senior counsel for Racing New South Wales conceded that the admission should have been reached more quickly. 2. I have this morning heard submissions from both parties concerning those applications and received written submissions from each party and an affidavit relied upon by the plaintiff. 3. The principles concerning an application for an order for costs to be paid on an indemnity basis were not in dispute. The parties agreed that those principles are accurately summarised by Black J in In the Matter of Indoor Climate Technologies Pty Ltd [2019] NSWSC 356 at [8] as follows: "The principles on which an order for indemnity costs may be made are also well established. Section 98(1)(c) of the Civil Procedure Act 2005 (NSW) permits the Court to order costs on an ordinary or indemnity basis. Rule 42.2 of the Uniform Civil Procedure Rules 2005 (NSW) provides that, unless the Court otherwise orders or the rules otherwise provide, costs payable are to be assessed on an ordinary basis. Rule 42.5 of the Uniform Civil Procedure Rules deals with an order for costs on an indemnity basis. Costs are awarded on the ordinary basis unless there are exceptional circumstances: Leichhardt Municipal Council v Green [2004] NSWCA 341. An order for indemnity costs is not made to punish an unsuccessful party for persisting with a case that fails, but to compensate a successful party fully for costs incurred, when the Court takes the view that it was unreasonable for the other party to have subjected the successful party to the expenditure of costs: Hamod v New South Wales [2002] FCAFC 97; (2002) 188 ALR 659 at [20]. Whether an indemnity costs order should be made depends, at least in part, on whether there was a relevant delinquency on the part of the unsuccessful party: Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (No 7) [2008] NSWSC 199; (2008) 65 ACSR 324 at [24]; Cabport Pty Ltd v Marinchek (No 2) [2013] NSWCA 131 at [6]. That is to be determined by reference to the conduct of the proceedings, not the conduct that is the subject of the substantive dispute." 1. Mr Dawson SC, who appeared for Racing New South Wales on the present application, submitted that it would be necessary for the plaintiff to establish that a point was reached when the defendants' position was untenable. However, as I read the principles stated by Black J in the decision to which I have referred, it would be enough if the Court takes the view that it was unreasonable for the defendants to have subjected Ms Webber to the expenditure of costs in the proceedings. 2. The circumstances in which the present orders are sought may be summarised as follows by reference to the material before me at the hearing and also the further material put in evidence today by the plaintiff. 3. The decision refusing to renew Ms Webber's licence was communicated to her in a letter dated 1 September 2016 which stated the reasons for the decision in the following terms: "After considering all the material before it, the Licensing Committee determined that in light of your financial position and performance, particularly with respect to work health and safety issues, you are unsuitable to continue as a licensed trainer." 1. After attempting by two separate means to seek internal review of that decision, each application being rejected by the defendants, Ms Webber's solicitor wrote to Racing New South Wales on 28 September 2016 seeking a number of documents, including a statement of reasons for the decision and a copy of any recommendation of the Licensing Committee on which the decision-maker relied in reaching the decision, including any supporting memoranda or other material. 2. The response to that letter was that the reasons for the decision were contained within the letter dated 1 September 2016, to which I have already referred, and that the Licensing Committee's recommendation was "a confidential internal document that Racing New South Wales does not propose to provide." 3. It later transpired, as I will explain, that a memorandum had been provided by the Licencing Committee reciting four reasons for the decision. That memorandum had been adopted by Mr V'landys or Racing New South Wales as decision-maker as the reasons for making the decision. 4. The notion that a document containing those reasons was "confidential" ought to have prompted reflection on the part of legal counsel for the defendants as to the transparency of the decision-making process. 5. Ultimately, Ms Webber was driven to commence proceedings, which occurred in early December 2016, and on 20 December 2016 a copy of the memorandum was provided to her. 6. In due course and throughout the proceedings the position maintained by the defendants was that there had been no denial of procedural fairness, that the decision to refuse to renew Ms Webber's licence was the result of a considered process and that it would not be reconsidered. 7. As recorded in the primary judgment, Ms Webber served a notice to produce on each defendant, seeking to obtain further documents relating to the process of decision-making. She could, alternatively, have sought leave under r 59.7 of the Uniform Civil Procedure Rules 2005 (NSW), but evidently failed to take up an opportunity allowed under directions of the Court to do so. The matter came before Beech-Jones J on 26 May 2017 when, notwithstanding the plaintiff's failure to avail herself of that process, his Honour took a pragmatic approach, ultimately making orders requiring Racing New South Wales to produce the documents sought, in effect proceeding as if an application under r 59.7 had been made: see Webber v Racing New South Wales [2017] NSWSC 687. 8. During the course of that hearing, counsel for Racing New South Wales accepted that some of the material adverse to Ms Webber relied upon by the defendants in making the decision had not been put to her before the decision was made. His Honour observed in that context that there may be some warrant for the defendants to consider their position in that respect, their being on notice as to the way in which the denial of natural justice was to be framed. 9. Following that hearing and in light of those developments, Ms Webber sought again to correspond with the defendants with a view to resolving the proceedings. In particular, in an email to the solicitors for the defendants in early June 2017 it was proposed, given the "concessions" made by the defendants at the hearing before Beech-Jones J, that the defendants immediately restore Ms Webber's licence pending determination of the proceedings or further agreement. 10. That proposal was resisted. At a court attendance that day it appears counsel for Racing New South Wales stated that from his perspective the defendants had not made any concessions whatsoever or admissions regarding the denial of procedural fairness. 11. The parties resolved that it would be necessary to obtain the transcript of the hearing before Beech-Jones J to resolve that contest. 12. Ultimately, on 16 June 2016, Ms Webber filed a notice of motion seeking orders pursuant to UCPR r 17.7 seeking judgment based on the alleged admissions. By that time the expiry of the period in respect of which Ms Webber contended her licence ought to have been renewed was fast running out. It was due to expire at the end of June 2017. 13. The motion was referred to Latham J as duty judge on the strength of the customary underestimate of the likely length of the hearing. I hasten to add that it is clear from the transcript that that estimate is not to be attributed to anyone who appeared before me in these proceedings. In any event, her Honour was obviously concerned as to the appropriateness of the matter to be determined in the Duty List. 14. At that time the defendants were represented by senior counsel. There was debate, the detail of which has been rehearsed at length in the hearing before me this morning, as to the appropriateness of the relief sought and of her Honour determining it in the Duty List. Importantly, it must be noted that senior counsel for the defendants made it clear that he did not acknowledge there had been any admission made at all by his junior at the hearing before Beech-Jones J and "certainly no admission of a denial of procedural fairness", which he submitted "in any event is not a sufficient matter even if demonstrated to ground relief because the relief is discretionary." 15. Ultimately, Latham J refused the application and ordered the plaintiff to pay the defendants' costs. 16. The matter was then listed for hearing and determined by me in the judgment to which I have referred. 17. Mr Dawson noted, correctly, that a bare concession that an applicant for an administrative decision has in fact not been heard on a particular issue falls short of a discrete concession as to denial of procedural fairness and, indeed, that any such denial amounted to jurisdictional error. 18. Mr Braham SC made it clear at the primary hearing before me that what was conceded shortly before that hearing, and clarified on the first morning of the hearing, was that the decision did entail jurisdictional error, the principal issue thereafter being whether any of the relief sought should be granted to the plaintiff and separately whether there was any utility in deciding a large number of other grounds relied upon by her. 19. Mr Dawson submitted that the application for costs to be paid on the indemnity basis appeared to proceed on an assumption that it followed inexorably from the factual admission or reality that certain matters had not been put to Ms Webber that it was unreasonable or untenable for the defendants not to concede jurisdictional error at that point, that is, at the hearing before Latham J. Separately, he submitted that none of those issues addressed the ongoing difficulty with these proceedings of the utility of granting the relief sought by Ms Webber after the expiration of the licence period or at a point in time close to the expiration of that period. 20. As to the utility of granting the relief sought, I determined that issue adversely to the defendants for the reasons explained in the primary judgment. 21. In my view, having regard to the history I have recited, the defendants did unreasonably subject Ms Webber to the costs of the proceedings, certainly from the point when the application was brought before Latham J, but in my view indeed from an earlier point. 22. I do not think it is necessary or appropriate to determine the precise point at which that realisation should have been reached. The material put before Latham J has persuaded me that the defendants at that point were taking an adversarial position in respect of what ought to have been an obvious concession that the failure to put the matters not put to Ms Webber not only amounted to a denial of procedural fairness but was one which went to jurisdiction. There ought, in my view, to have been a concession made at that point in those terms. 23. I accept that there remained a live issue as to what should happen after that, but a frank concession at that time is likely to have resulted in a very different course of the proceedings. 24. Mr Dawson submitted that the Court could not be satisfied that that was so, having regard to the course taken by the plaintiff at the later point in time at the hearing before me when the plaintiff strenuously argued that the Court should determine all of the grounds for review identified in the summons and not merely rest on the concession. 25. I determined that issue in a sense adversely to the plaintiff, in that I concluded it was neither necessary nor appropriate to determine the additional grounds, as one jurisdictional error was enough. But my review of the transcript of the proceedings before Latham J has persuaded me that Ms Heath, appearing for Ms Webber, was making it as plain as she could that if a concession or determination of jurisdictional error at that point were made, the proceedings would be resolved in a way that would have obviated the need for the lengthy further timetable and lengthy hearing before me. 26. In that context I note that in some respects some of the argument on this issue appeared to conflate the question of jurisdictional error with the question of the proper exercise of the Court's discretion. It was not for the defendants to concern themselves with the latter in the sense of pre-empting anything the Court might do. If the concession had been forthcoming, then submissions could still have been put as to the proper exercise of the Court's discretion. While that may not have been able to be addressed in the Duty List, the concession could have resulted in a significantly expedited procedure, resulting in a much earlier resolution of these proceedings and one which would have been significantly less costly to both parties. 27. No explanation has been put forward as to the refusal to provide the reasons set out in the committee's memorandum prior to the commencement of the proceedings and no explanation has been put forward as to the resistance to any relief sought in circumstances where jurisdictional error was ultimately conceded. With respect, I would adopt Ms Heath's submission that the behaviour of the defendants in the circumstances in their dealings with Ms Webber was at least unhandsome. 28. For those reasons it is my view that the defendants should pay the plaintiff's costs on an indemnity basis from the date of the hearing before Latham J. I choose that date on the basis that it is the latest date past which I am satisfied that it was unreasonable for the defendants to expose the plaintiff to the costs of the proceedings. That is not to say that I have determined that is the date on which the determination should have been made to make the concession as to jurisdictional error. In my view that concession ought to have been made well before that date, but being unable to pinpoint an appropriate point in time, and noting the terms in which an order is sought by the plaintiff, I choose that time as the point from which, considering all of the circumstances as to which I have been addressed this morning, the indemnity basis for assessement should cut in. 29. A separate question is whether it is appropriate to reverse the order of Latham J that the plaintiff pay the defendants' costs of the application before her Honour. Ms Heath relied in respect of that application on r 36.16(3). 30. Mr Dawson accepted that the Court would have authority under that rule to make the order sought, but submitted that an earlier order for costs made in the proceedings should not automatically, by reason of the existence of that power, be considered as being "up for grabs" at a later point in the proceedings. He submitted, and I accept, that it is necessary to establish the costs order should not have been made or that the costs order was unjustly made. 31. Mr Dawson submitted that at the hearing before Latham J the waters were muddied by the fact that Ms Heath handed up three volumes of material which tended to suggest that notwithstanding her contention to the effect that the resolution of the application would obviate the need for the Court to consider the remaining grounds, the Judge was presented with what looked like an application addressing all of those remaining grounds. 32. Ms Heath explained in submissions in reply that her position was not that those three volumes were to be relied on in support of the application. She explained why they were provided to Latham J, and I accept that explanation. 33. In my view it follows from my conclusion in respect of the timing of the concession that the costs order made by Latham J ought not to have been made, and I consider it appropriate to vacate that order. 34. Ms Webber does not seek an order that the defendants pay her costs of that application, but I would understand those costs to be comprehended within the application that the defendants should pay the plaintiff's costs. 35. I do, however, consider that the costs of the application before Latham J should be assessed on the ordinary basis. I propose to order that costs after that date be paid on the indemnity basis. 36. The defendants submitted that the orders should be that the defendants pay fifty per cent of Ms Webber's costs of the hearing before me and that the defendants otherwise pay the plaintiff's costs of the proceedings. 37. As to the application for a proportionate order, I do not think this is a case in which it is appropriate to apportion issues. As submitted by Ms Heath, the fact that I did not consider it appropriate to determine all of the grounds for review relied upon by the plaintiff does not mean that the plaintiff lost on those issues, but only that they were not determined. 38. For those reasons the orders are as sought by the plaintiff, with the qualification as to the commencement date which I have indicated, namely, that the defendants pay the plaintiff's costs of the proceedings, that after 30 June 2017 those costs be assessed on the indemnity basis and that the costs order made by Latham J on 30 June 2017 be vacated. 39. The costs payable by the defendants should include the costs of the hearing today. ********** 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: 17 June 2019