1 Rocky Point Pty Ltd v Chief Commissioner for State Revenue (Rd) (No 4)

[2011] NSWADTAP 52

Administrative Decisions Tribunal

New South Wales

Case Title:	1 Rocky Point Pty Ltd (No 4) v Chief Commissioner for State Revenue (RD)
Medium Neutral Citation:	[2011] NSWADTAP 52
Hearing Date(s):	16 February 2011; heard on the papers with submissions closing 16 May 2011
Decision Date:	16 November 2011
Jurisdiction:	Appeal Panel - Internal
Before:	J Needham SC, Deputy President M Hole, Judicial Member C Bennett, Non Judicial Member
Decision:	The costs of the appeal and of the argument as to costs be paid on the ordinary basis by the applicant.
Catchwords:	Costs - "untenable in fact or law" - whether fair to order costs
Legislation Cited:	Administrative Decisions Tribunal Act 1977 Land Tax Management Act 1956
Cases Cited:	Rocky Point Pty Limited v Chief Commissioner of State Revenue (No. 2) [2010] NSW ADT 138 1 Rocky Point Pty Ltd v. Chief Commissioner of State Revenue (No 3) [2011] NSWADT (unreported) AT v. Commissioner of Police NSW [2010] NSWCA 131 Macary v. Commissioner of Stamp Duties [1980] 1 NSWLR 510 O'Sullivan v. Medical Centre of New South Wales [2010] NSWADTAP 64 Skiwing Pty Ltd v. Trust Company Limited [2010] NSWADTAP 73 Perry Properties Pty Ltd v. Chief Commissioner of State Revenue [2011] NSWADTAP 1 Avitaia v. Chief Commissioner of State Revenue [2008] NSWADTAP 57
Texts Cited:
Category:	Costs
Parties:	1 Rocky Point Pty Limited (Appellant) Chief Commissioner of State Revenue (Respondent)
Representation
- Counsel:	Counsel AH Rider, (Respondent)
- Solicitors:	Robert Richards (Appellant) Crown Solicitor (Respondent)
File number(s):	109043
Decision Under Appeal
- Court / Tribunal:
- Before:	Revenue Division
- Date of Decision:	09 June 2010
- Citation:	[2010] NSWADT 138
- Court File Number(s)	096091
Publication Restriction:

REASONS FOR DECISION

1. APPEAL PANEL: J. NEEDHAM SC (Deputy President), M. HOLE (Judicial Member) and C. BENNETT (Non-Judicial Member): The applicant in Rocky Point Pty Limited v Chief Commissioner of State Revenue (No. 2) [2010] NSW ADT 138) appealed from the decision of the learned Judicial Member, Mr Perrignon, and that matter came on for hearing on 16 February 2011.

2. On that date the Appeal Panel determined (see 1 Rocky Point Pty Ltd v. Chief Commissioner of State Revenue (No 3) (unreported) that the decision of the judicial member at first instance was correct, and that the decision of the Court of Appeal in Macary v. Commissioner of Stamp Duties [1980] 1 NSWLR 510 was fatal to the appeal. Accordingly, the outcome of that hearing was that the decision of the Tribunal below should be affirmed.

3. The Respondent, the Chief Commissioner, now seeks costs of the hearing as follows:

   a) the first instance proceedings before Judicial Member Perrignon other than the period 1 October 2000 to 22 January 2010 inclusive;

   b) appeal panel proceedings before the appeal panel; and

   c) of the costs application.

4. The period excluded relates to the costs of a preliminary question for summary dismissal which was heard by Judicial Member Verick on 23 November 2009.

Respondent's Application For Costs

1. The application for costs is made by reference to s 88(1A) of the Administrative Decisions Tribunal Act 1997 . That section reads:

   "Costs ....

   (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:

   ...

   (c)the relative strength 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 ..."

Respondent's Application For Costs

1. The Respondent sought costs on the basis that the jurisdiction of the Tribunal is engaged by the circumstances for the order having arisen (see AT v. Commissioner of Police NSW [2010] NSWCA 131) in that there was "no tenable basis in fact or law" for the position taken by the Applicant in the Tribunal below and the Appellant in the proceedings on appeal. The Commissioner also relied on a question of whether the making of the order was "fair" which took into account the compensatory purpose of an award for costs. (See AT v. Commissioner of Police, supra, at [33]).

2. The respondent submitted that the costs regime under s 88(1A) gives a flexible approach to costs and one in which the Tribunal should have very little difficulty in finding that the substantial disparity between the relative strengths of the parties and the weakness of the appeal itself were matters to be taken into account. (See O'Sullivan v. Medical Centre of New South Wales [2010] NSWADTAP 64 and Skiwing Pty Ltd v. Trust Company Limited [2010] NSWADTAP 73). It is submitted on the basis of various decisions of this Tribunal, including that in Perry Properties Pty Ltd v. Chief Commissioner of State Revenue [2011] NSWADTAP 1 at [7-9] and [23], that the Appeal Panel is entitled to make an order for costs relating to proceedings in the tribunal below by reason of an Appeal Panel assessment of costs.

The Appellant's Response

1. The appellant submitted that its position of resisting an order for costs was upheld by the fate of the claim. It was submitted that Judicial Member Verick assessed the case and noted that there were some differences between the factual situations in this case and in Macary and also in Avitaia v. Chief Commissioner of State Revenue [2008] NSWADTAP 57. Drawing from the decision on the summary dismissal claim, the appellant submitted that there was indeed a "tenable basis in fact or law" and that no costs order should follow.

2. Further, the appellant submitted that the respondent should not make this application when it was bound by the Model Litigant Policy for civil litigants of 8 July 2008. It was submitted that in order to make a submission that the s 88(1A) requirement that it was "fair" to make a costs order should have been supported by evidence. The appellant submitted that mere success by the respondent does not justify an award of costs. Further, it submitted that the success of the parties should not be measured solely by the outcome of the proceedings but also by reference to the observations made by Judicial Member Verick. Finally, the appellant pointed to the fact that there was a tenable basis "in fact or law" and that Judicial Member Verick found that the matter raised "issues of real substance".

The Respondent's Reply

1. The respondent replied noting that the test on an application for summary dismissal and that on costs differs, and that the Appeal Panel, in determining the costs issue, should not be bound by any failure to achieve summary dismissal. Secondly, the respondent noted that the question of fairness is not necessarily one for evidence and that the appeal panel can make a determination on fairness based on the matters before it. The respondent further submitted that the interlocutory decision period was not the subject of any application for costs and so that period is not relevantly part of this application. Finally, the respondent noted that the failure by the respondent to appeal from the interlocutory decision cannot amount to an acceptance of the decision when the respondent went on to seek to have the substantive position determined.

Consideration

1. Consideration of s 88(1A) requires, firstly, reaching of a state of satisfaction on the part of the Appeal Panel that it is fair to order costs having regard to a number of factors. In this application the relevant factors are "the relative strengths of the claims made by each of the parties including whether a party has made a claim that had no tenable basis in fact or law".

2. It appears to the Appeal Panel that the only conclusion that can be reached is that the reasons of the Appeal Panel in the determination of this appeal demonstrate that there was indeed no basis of fact or law which would enable the applicant to succeed. The interlocutory decision merely determined that the matter could proceed to a final hearing. The findings of Judicial Member Verick were not, of their very nature, binding on the Appeal Panel. When one looks at the meaning of "owner" in the Land Tax Management Act 1956 and the terms of the finding of Mason P in Macary , the appeal was bound to fail.

3. It is the Appeal Panel's view that given the impact of the interlocutory decision, it could be said that, while the proceedings were ultimately untenable, it may not be "fair" to award costs against the applicant in the Tribunal below. The role of the Tribunal at first instance is administrative; it has the task of making the "correct and preferable" decision in the circumstances. It did so, taking into account the matters raised by Judicial Member Verick, and gave a decision which was clearly correct in the light of the authorities. Once the judicial member had determined those proceedings in unambiguous and clear terms, it was the position that the appeal, involving as it did a direct application of a Court of Appeal decision binding upon the Tribunal, was bound to fail. It can be said that after the determination of the Tribunal below, the applicant was on notice that the Macary judgment in particular was adverse to its success, and that in proceeding to have a determination of an appeal in the circumstances was "untenable". In other words, while it would not be "fair" to impose costs for the hearing below, it is "fair" to do so on the application before the Appeal Panel.

4. It appears to us to be fair to order costs of the Appeal Panel proceedings on that basis but in our view not of the proceedings in the Tribunal below. The respondent, in applying for costs, has been more successful than not. Accordingly, our decision is that the costs of the appeal and of the argument as to costs be paid on the ordinary basis by the applicant.

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