Department of Attorney General and Justice v Schoeman
[2012] NSWADTAP 31
•03 August 2012
Administrative Decisions Tribunal
New South Wales
Medium Neutral Citation: Department of Attorney General and Justice v Schoeman [2012] NSWADTAP 31 Hearing dates: 26 March 2012 Decision date: 03 August 2012 Jurisdiction: Appeal Panel - Internal Before: Magistrate N Hennessy, Deputy President Decision: (1) The Tribunal's decision that the Department of Attorney General and Justice is to pay Ms Schoeman's costs is set aside.
(2) The appeal is extended to the merits of the Tribunal's decision.
(3) Ms Schoeman's application for costs is dismissed.
Catchwords: COSTS - matter settled - whether fair to award costs - relevance of pre-litigation conduct - primary findings of fact - exercise of evaluative judgement - relevant and irrelevant consideration - extension to the merits Legislation Cited: Administrative Decisions Tribunal Act 1997
Freedom of Information Act 1989 (repealed)
Government Information (Public Access) Act 2009
State Records Act 1998Cases Cited: Absolon v NSW TAFE [1999] NSWCA 311
AT v Commissioner of Police (NSW) [2010] NSWCA 131
Australian Aqua Air Pty Ltd v Chief Commissioner of State Revenue [2009] NSWADT 239
Azzopardi v Tasman UEB Industries Ltd (I985) 4 NSWLR 149
B & L Linings Pty Ltd v Chief Commissioner of State Revenue (No 5) [2010] NSWADTAP 21
Cripps v G & M Dawson Pty Ltd & Anor [2006] NSWCA 81
House v the King (1936) 55 CLR 499
K v K [2000] NSWSC 1052
Kelly v Chief Commissioner of State Revenue (No 2) [2010] NSWADT 52
Kiama Council v Grant (2006) 143 LGRA 441
Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390
Lloyd v Veterinary Surgeons Investigating Committee [2005] NSWCA 456
Minister for Aboriginal Affairs v Peko Wallsend Ltd (1986) 162 CLR 24
One Tel Ltd v Commissioner for Taxation [2000] FCA 270; 101 FCR 548
Ormwave Pty Ltd v Smith [2007] NSWCA 210
Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110
Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247
University of New South Wales v PC (GD) [2008] NSWADTAP 26
World Best Holdings Limited v Sarker [2010] NSWCA 24Category: Principal judgment Parties: Department of Attorney General and Justice (Appellant)
Fiona Schoeman (Respondent)Representation: Crown Solicitor (Appellant)
Norton Rose Australia (Respondent)
File Number(s): 129002 Decision under appeal
- Citation:
- Schoeman v Department of Attorney General and Justice [2011] NSWADT 308
- Date of Decision:
- 2011-12-23 00:00:00
- Before:
- General Division
- File Number(s):
- 113021
REASONS FOR DECISION
Introduction
The general rule in proceedings before the Tribunal is that each party pays their own costs. Costs may only be awarded when it is fair to do so: Administrative Decisions Tribunal Act 1997 (ADT Act). The Tribunal ordered that the Department of Attorney General and Justice pay Ms Schoeman's costs. The Department appealed. I have decided that the Tribunal made an error of law in awarding costs and that the decision should be set aside. I also decided to consider the merits of the costs application and to apply the general rule that each party pay their own costs.
Background
Ms Schoeman applied to the Department of Attorney General and Justice for a document under the Government Information (Public Access) Act 2009 (GIPA Act). The Department provided a copy of the document with certain parts deleted. The attachments to the document were not provided. Ms Schoeman applied to the Tribunal for a review of that decision. Following several Planning Meetings, the parties filed Consent Orders pursuant to which the Department provided Ms Schoeman with a full copy of the document and copies of the documents in the attachments that it was able to locate. The majority of the documents in the attachments could not be found. Ms Schoeman applied for costs. The Tribunal made a decision, 'on the papers', to award costs against the Department as agreed or assessed: Administrative Decisions Tribunal Act 1997 (ADT Act), s 76.
The Department has appealed against that decision on questions of law. The Department has also sought leave for the appeal to extend to a review of the merits of the Tribunal's decision: ADT Act: s 113(2).
Chronology
In 2010 Ms Schoeman applied for a copy of an Investigation Report prepared for the Department in 2008 by an external consultant. The Investigation Report related to a grievance Ms Schoeman had lodged against another employee of the Department. The external consultant had provided the Report to the Department. The Report contained an index listing twelve attachments comprising copies of correspondence, interview notes with six employees and policy documents.
The Department made a determination under the recently commenced GIPA Act to provide Ms Schoeman with a copy of the Investigation Report with various passages deleted. The reason given for deleting some passages was that they contained information obtained in confidence. The Department concluded that the need to protect and encourage the free exchange of information when investigating complaints outweighed Ms Schoeman's right to access the exempt portions of the document. The original determination also noted that the attachments could not form part of the determination because it was not information "held" by the Department: GIPA Act, s 53(1).
On 20 January 2011, Ms Schoeman applied to the Tribunal for a review of the Department's decision: GIPA Act, s 100.
At the first Planning Meeting on 1 March 2011 Ms Schoeman was self-represented. The Tribunal made directions for the filing and service of evidence and submissions and directed the Department to consult with the individuals whose personal information was contained in the withheld portions of the Report. On 19 April 2011 the Department filed written submissions defending its decision to provide a redacted copy of the Investigation Report. The Department also filed two statements from employees setting out the searches that had been undertaken for the missing documents. Ms Schoeman's lawyers filed a Notice of Appearance on 9 May 2011 and filed a statement and submissions in response on 20 June 2011.
At the next Planning Meeting on 12 July 2011, the parties advised the Judicial Member that, apart from the issue of costs, the application had been resolved by the provision of a full copy of the Investigation Report. Ms Schoeman withdrew the "adequacy of search" objection in relation to the missing documents in the attachments. The Tribunal's Result Sheet 'noted' that the Judicial Member would refer the question of the 'missing documents' to the Office of the Information Commissioner under s 111 of the GIPA Act. Section 111 of the GIPA Act provides that:
The ADT may refer any matter to the Information Commissioner that the ADT considers is indicative of a systemic issue in relation to the determination of access applications by a particular agency or by agencies generally.
Directions were made in relation to the filing and service of submissions on costs.
On 12 July 2011, the same day as the Planning Meeting, the Department's lawyers wrote to the Tribunal advising that the Department did not consent to the referral of the matter to the Information Commissioner and requested that the matter be re-listed.
A further Planning Meeting was held on 18 July 2011 at which time the issue of referral to the Office of the Information Commissioner was discussed again. The Tribunal confirmed that it would refer the matter. On 22 July 2011 the Department's lawyers wrote to the Tribunal advising that they were instructed to commence proceedings in the Supreme Court for a declaration that the Tribunal had no power under s 111 of the GIPA Act to refer the matter of the missing documents to the Information Commissioner. On 9 August the Tribunal was advised that the Department no longer instructed its lawyers to commence those proceedings.
On 21 October 2011, following a Planning Meeting on 18 October 2011, the parties filed Consent Orders. The Tribunal made orders in those terms releasing the Investigation Report in full, together with copies of those missing documents that could be located. There was no reference in those orders to a referral under s 111, but the orders 'noted' various matters including that:
(1) the Department was unable to locate various attachments and Ms Schoeman remains concerned that those documents are missing;
(2) the Department did locate and provide some of the correspondence in Attachment 2; and
(3) Ms Schoeman reserved her right to raise the issue of the adequacy of the Department's record keeping under the State Records Act 1998 with an appropriate statutory authority.
These notes have no legal effect because they are not orders of the Tribunal: ADT Act, s 86(1).
Ms Schoeman's lawyers filed written submissions on costs on 17 November 2011 stating that its costs to date were $43,803.09.
The Department filed a Statement of Ms Ohnesorge, a solicitor employed by the Crown Solicitor, as well as written submissions, on 2 December 2011. Ms Ohnesorge's statement dealt with the procedural history of the matter and attached relevant communications. Ms Schoeman's lawyer wrote to the Tribunal on 7 December 2011 objecting to the Department filing evidence when the Tribunal had only directed the parties to file submissions. That letter concluded by stating that, "Unless we hear otherwise, we expect that the Tribunal will only take the parties' submissions into account when determining the issue of costs 'on the papers'." The Tribunal did not reply to that letter and did not refer to Ms Ohnesorge's evidence in its decision.
On 23 December 2011 the Tribunal handed down its decision ordering the Department to pay Ms Schoeman's costs as agreed or, in the absence of agreement, as assessed.
After the decision had been handed down, Ms Schoeman wrote to the Tribunal asking whether the issue of the missing documents had been referred to the Office of the Information Commissioner. The Registrar replied stating that the Judicial Member had decided that since the substantive matter had been settled, no further purpose would be served by a referral under s 111.
The costs provision: s 88
Section 88 of the ADT Act sets out the law in relation to costs in Tribunal proceedings:
(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.
(2) The Tribunal may:
(a) determine by whom and to what extent costs are to be paid, and
(b) order costs to be assessed on a basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis.
(3) However, the Tribunal may not award costs in relation to proceedings for an original decision unless the enactment under which the Tribunal has jurisdiction to make the decision provides for the awarding of costs.
(4) In this section, "costs" includes:
(a) costs of or incidental to proceedings in the Tribunal, and
(b) the costs of or incidental to the proceedings giving rise to the application, as well as the costs of or incidental to the application.
The following observations, taken from the Court of Appeal's decision in AT v Commissioner of Police (NSW) [2010] NSWCA 131 at [21] and [33], are relevant:
(1) the general principle is that each party should bear its own costs;
(2) the Tribunal may only award costs if it is "satisfied" that it is "fair" to do so;
(3) the exception to the general principle represents a "relatively low threshold" for an applicant seeking an order;
(4) determining whether the exception applies involves both findings of primary fact and the exercise of an evaluative judgment;
(5) when exercising the evaluative judgment, relevant considerations include the nature of the jurisdiction and the objects of the ADT Act.
The Tribunal's decision
The Tribunal expressly took into account three matters in reaching a view that it was fair to award costs. Those three matters, in order of significance to the Tribunal, were:
(1) that the Department had not, at any stage, addressed the adequacy of search tests in s 53; (at [17])
(2) that some of the documents have been "inexplicably lost" and that that represented a failure in the Department's document management system; (at [18])
(3) the Department did not release a full copy of the report when making its original determination and Ms Schoeman had to apply to the Tribunal before obtaining access to a full copy of the report (at [13]).
I will refer to these matters as the adequacy of search matter, the lost documents matter and the redacted information matter.
The Tribunal expressly rejected two considerations that Ms Schoeman said were relevant. They were that the filing of Consent Orders had been delayed by confusion over which documents were lost (at [19]) and that the Department did not consent to participate in mediation (at [24]).
The Tribunal also mentioned, but did not make findings about, two other matters contained in Ms Schoeman's submissions:
(1) the Department's foreshadowed Supreme Court challenge to the s 111 referral delayed the resolution of the matter and may have resulted in additional costs; (at [18]); and
(2) the Department refused to make oral submissions on costs at the Planning Meeting thereby increasing costs relating to the preparation of written submissions (at [20]).
I will refer to these matters as the overlooked matters. I will firstly address the grounds of appeal in relation to the three matters that the Tribunal took into account in exercising its discretion to award costs. I will then address the "overlooked matters". Finally I will consider the Department's application for leave for the appeal to extend to the merits of the Tribunal's decision.
Adequacy of search matter
Background
Ms Schoeman's lawyers submitted to the Tribunal at first instance that one reason for awarding costs was the Department's failure to provide adequate evidence and information regarding its searches for the missing documents.
The Tribunal pointed out that the GIPA Act, unlike its predecessor, the Freedom of Information Act 1989, requires an agency to undertake 'such reasonable searches as may be necessary to find any of the government information applied for ...': s 53(2). That provision states, in full, that:
An agency must undertake such reasonable searches as may be necessary to find any of the government information applied for that was held by the agency when the application was received. The agency's searches must be conducted using the most efficient means reasonably available to the agency.
The Tribunal concluded at [17] that:
I accept that the applicant was put to significant legal expense in obtaining legal advice and representation in prosecuting the application for review in circumstances where the respondent had, at that time, apparently taken no steps to address that statutory requirement, while maintaining its position that the missing documents are unable to be located. Had the matter not settled it would have been open to the applicant to have the Tribunal review the respondent's 'decision' that it did not hold the annexures: S80(e). Importantly, in my view, the respondent did not at any stage address the 'adequacy of search' tests in S53(2) -(5).
Grounds of Appeal
The Department submitted that the Tribunal had erred in law by:
(1) taking into account the adequacy of search matter when that matter was not a relevant consideration; and
(2) making findings about that issue on the basis of 'no evidence'.
Irrelevant consideration
The Department submitted that the Tribunal erred by having regard to an irrelevant consideration, namely the Tribunal's power to review the adequacy of an agency's search, in circumstances where Ms Schoeman had withdrawn any reliance on that issue.
For an appeal on a question of law to be successful in relation to exercising an evaluative judgment, it "must appear that some error has been made in exercising the discretion": House v the King (1936) 55 CLR 499 per Dixon, Evatt and McTiernan JJ at 505.
As well as the particular matters listed in s 88(1A), paragraph (e) allows the Tribunal to take into account "any other matter that the Tribunal considers relevant" when deciding whether to make a costs order. The Court of Appeal has held that, "[T]he width and open-ended nature of the factors mentioned in s 88(1A), particularly that in para (e), make it very difficult to identify an error of law in a finding that a particular matter is relevant." World Best Holdings Limited v Sarker [2010] NSWCA 24 at [101].
The Tribunal will only make an error of law by taking into account an irrelevant consideration if that consideration is a consideration that the Tribunal is bound not to take into account: Minister for Aboriginal Affairs v Peko Wallsend Ltd (1986) 162 CLR 24. Whether or not a decision-maker is bound to take into account or ignore any particular matter is to be determined from the "subject-matter, scope and purpose" of the ADT Act and the GIPA Act: Peko Wallsend, per Mason J at 39-40.
The basis on which the Department submitted that the inadequate search matter was irrelevant was that Ms Schoeman had agreed to Consent Orders thereby effectively settling the issue.
In the context of hearings where the usual rule is that the winner pays the loser's costs, courts have set out the principles to be applied when there has been no hearing on the merits. The cases distinguish between two situations: surrender and settlement. Surrender is where one party discontinues or submits to orders in effectively the same terms that the other party has claimed. Settlement is where the parties resolve the claim so that no issues remain except costs: One Tel Ltd v Commissioner for Taxation [2000] FCA 270; 101 FCR 548 at [6]. In the case of a surrender, courts will generally make the usual costs order, that is that the winner pays the loser's costs. In the case of a settlement, courts will generally make no order as to costs unless one party has acted so unreasonably that a costs order is justified: Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6 at 3; (1997) 186 CLR 622 at 2; Kiama Council v Grant (2006) 143 LGRA 441 at [80].
Courts have emphasised that in circumstances where there has been no hearing on the merits, it cannot try a hypothetical action between the parties when one party makes a costs application. To do so would burden the parties with costs that they had avoided by settling the claim. However, in some circumstances courts will make a judgement on the more general question of whether the applicant acted reasonably in bringing the proceedings or whether the respondent acted reasonably in defending them up until the time of the settlement: Lai Qin at 3. That conduct may be relevant to the issue of costs.
These principles also make sense when considering a costs application under s 88 of the ADT Act where the general rule is that each party pays their own costs. If a costs application is made, and one party has effectively surrendered to the other party, the merits of their case and, in particular, whether they have made a claim that has no tenable basis in fact or law, is a relevant consideration: s 88(1A)(c). When a case is settled, the merits of the case have not been assessed and it is less likely to be fair to award costs.
Under s 53(1) of the GIPA Act, "[t]he obligation of an agency to provide access to government information in response to an access application is limited to information held by the agency when the application is received." When conducting a review of a "reviewable decision" under s 100 the Tribunal is entitled to review the Department's decision that government information is not held by it: s 80(e). The Department's obligations under the GIPA Act do not extend to providing access to documents it does not hold. At most, the Tribunal may determine whether adequate searches have been undertaken: s 53(2).
The way the adequacy of search issue was resolved was that Ms Schoeman chose not to pursue that issue. It was settled by her withdrawal of that ground of review. The Tribunal "cannot try a hypothetical action between the parties": Lai Qin at 2. One of the purposes of the ADT Act is to encourage parties to reach an agreement with or without referral to mediation: ADT Act, Part 4. Parties should not be discouraged from reaching a settlement because of a threat that a costs order will be made.
However, I am not satisfied that compliance with s 53 of the GIPA Act was a consideration that the Tribunal was bound not to take into account. The Tribunal was entitled to consider the strength of the Department's case and, in particular, whether it had not tenable basis in fact or law: s 88(c). On the basis of that conclusion, the Tribunal did not make an error of law by having regard to that matter.
No evidence ground
Alternatively, the Department submitted that there was no evidence on which the Tribunal could have made the finding that the Department did not at any stage address the 'adequacy of search' tests in s 53(2)-(5). A failure to make a material finding of fact or making a finding based on 'no evidence' or no probative evidence, may be an error of law sufficient to justify the Tribunal's decision being set aside: Azzopardi v Tasman UEB Industries Ltd (I985) 4 NSWLR 149 at I55-156; Ormwave Pty Ltd v Smith [2007] NSWCA 210; 5 DDCR 180 at [14] per Beazley JA, with whom Santow and Ipp JJA agreed; Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390 at [90].
There was no hearing in relation to either the substantive application or the costs application. The substantive application was settled and the costs application was decided 'on the papers'. The Tribunal impliedly refused to take into account any evidence filed by the parties on the costs application when it did not reply to the letter from Ms Schoeman's lawyers of 7 December 2011 objecting to the Department filing evidence from Ms Ohnesorge.
On 19 April 2011 the Department filed statements from Kevin Mullins and Larissa Kotlaroff. Ms Kotlaroff set out the steps she had undertaken to search for the documents commencing on 4 November 2010. Mr Mullins set out evidence of the searches he had made commencing on 21 March 2011 and attached copies of some of the missing documents. These statements were filed but not admitted into evidence. I have concluded that the Tribunal did not take this evidence into account because that evidence was not admitted in any proceedings, the Tribunal did not refer to it and it was contrary to its findings that the Department "did not at any stage address the 'adequacy of search' tests".
The making of that critical finding without evidence justifies the costs decision being set aside. It is not an answer to this ground of appeal that the Judicial Member presided at each of the Planning Meetings and was aware of and concerned about the lost documents. The finding that the Tribunal made was a specific finding for which there was no evidence.
Lost documents matter
Background
At [18] the Tribunal held that:
Some documents remain, inexplicably, lost. The applicant submitted, and I agree, that the respondent's failure in terms of document management is also a factor that weighs in favour of her application for a costs order. The failure of the respondent in terms of document retention and management led to the difficulties in progressing the matter at the Planning Meetings . . .
Grounds of appeal
The Department submitted that the Tribunal had erred in law by:
(1) taking into account the lost documents matter when that matter was not a relevant consideration;
(2) making a finding on the basis of 'no evidence'.
Irrelevant consideration
Whether or not the documents had been lost because of failures in the record management system was an irrelevant consideration that the Tribunal was bound not to take into account.
Under the GIPA Act an agency's obligation to provide access to government information is "limited to information held by the agency when the application is received": GIPA Act, s 53(1). Nothing in the GIPA Act imposes an obligation on an agency to ensure that it does not lose information. Records management is governed by the State Records Act 1998, not the GIPA Act.
It follows that the Tribunal made an error of law by taking into account the fact that the Department had lost the documents or that it had a deficient records management system, when determining whether it was fair to award costs. That is a second basis for setting aside the Tribunal's decision.
No evidence ground
In addition, while it was agreed that the documents had been lost, there was no evidence in relation to the Department's record management system or practices. The Tribunal's conclusion that the Department had failed in terms of document retention and management was made without evidence. That is a third basis for setting aside the decision.
Redacted information matter
Background
A matter that the Tribunal expressly took into account, but to which it gave "limited weight", was the fact that the full Report was not released to Ms Schoeman until after she commenced proceedings and had filed evidence and submissions. At [13] the Tribunal stated that:
The applicant also submitted that the Tribunal should exercise its discretion in relation to costs because of (pre-application for review) conduct. While I place limited weight on the respondent's conduct before the proceedings were commenced, it remains that, it was only due to the applicant's perseverance by bringing the application for review that the full report was released to her (to the extent that the Respondent continued to hold the complete report).
Grounds of appeal
The Department submitted that the Tribunal had erred in law by:
(1) failing to give adequate reasons for taking into account the Department's pre-litigation conduct;
(2) taking into account the Department's pre-litigation conduct when that matter is not relevant; and
(3) failing to make relevant findings of fact including what conduct the Department had engaged in, the strength of the Department's claim and whether it had behaved as a model litigant.
Inadequate reasons
The Department submitted that given its detailed submissions that pre-litigation conduct was irrelevant, the Tribunal's reasons for finding that that conduct should be given "limited weight" were inadequate.
Section 89(2) of the ADT Act imposes a duty on the Tribunal to give reasons, either orally or in writing, when written reasons for an oral decision have been requested. Section 89(5) provides that written reasons are to set out:
(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based,
(b) the Tribunal's understanding of the applicable law,
(c) the reasoning processes that lead the Tribunal to the conclusions it made.
This provision is confined to the situation where a party requests written reasons for an oral decision. That was not the case in relation to the decision under appeal. Nevertheless, it is consistent with the judicial duty to give 'adequate' reasons: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 269-70; Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110. That duty applies to tribunals as well as courts. In Absolon v NSW TAFE [1999] NSWCA 311, the Court of Appeal considered whether appropriate reasons had been given for a decision of the Equal Opportunity Division of the Tribunal. Powell JA at [67] and [68] explained that it will be sufficient if a judge 'apprises the parties of the broad outline and constituent facts of the reasoning' on which he or she has acted.'
The parties must be able to understand the extent to which their submissions on critical issues have been understood and accepted: Pollard at [58] to [59]. The weight to be given to the evidence is a question of fact. As Mason J explained in Minister for Aboriginal Affairs v Peko- Wallsend Ltd (I986) [1986] HCA 40; 162 CLR 24 at 40, "it is generally for the decision-maker and not the court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising the statutory power." It was open for the Tribunal to give limited weight to this issue without explaining why it had made that decision. However, in my view, the Tribunal's failure to give any reasons for rejecting the Department's submission that pre-litigation conduct was irrelevant means that its reasons were inadequate in that respect.
As Powell J said in Absolon, the giving of inadequate reasons does not necessarily vitiate the decision. A decision will only be set aside where the absence or inadequacy of the reasons discloses that the Tribunal has failed to exercise its powers according to law. Consequently the decision should only be set aside on this ground if the Tribunal's conclusion that pre-litigation conduct is relevant was made in error.
Relevance of pre-litigation conduct
There is some inconsistent authority among Tribunal decisions as to whether pre-litigation conduct is relevant to costs. In B & L Linings Pty Ltd v Chief Commissioner of State Revenue (No 5) [2010] NSWADTAP 21, the Appeal Panel considered whether the Chief Commissioner's pre-litigation conduct was relevant to B & L Lining's costs' application. The Appeal Panel drew on principles enunciated by the Court of Appeal in relation to the same and other litigation to conclude that the Chief Commissioner's pre-litigation conduct was directly relevant. The Appeal Panel concluded by holding at [114] that ". . . when pre-litigation conduct by a statutory body representing the Crown falls below the standard of a 'model litigant' thereby increasing the costs incurred by the opposing party, this must be taken into account when awarding costs."
The Department submitted that the Appeal Panel had misinterpreted the Court of Appeal's judgements. It also submitted that, as a matter of statutory construction, s 88 does not empower the Tribunal to award costs in relation to pre-litigation conduct. Finally, the Department relied on contrary authority of the Tribunal sitting at first instance in Australian Aqua Air Pty Ltd v Chief Commissioner of State Revenue [2009] NSWADT 239 at [19] and Kelly v Chief Commissioner of State Revenue (No 2) [2010] NSWADT 52 at [56].
In our view pre-litigation conduct may be relevant when determining whether it is "fair" to award costs. That proposition is supported by the terms of s 88, the authorities on s 88 and its predecessor and the principles applied by the courts for awarding costs in merits review matters.
Section 88 clearly states that costs may only be awarded "in relation to proceedings before it". Because Ms Schoeman was not legally represented prior to the commencement of the proceedings, there is no issue about whether she is entitled to costs that were incurred prior to that date. The issue is whether the Department's conduct prior to the proceedings being commenced is relevant when determining whether to award costs in relation to the proceedings.
In Australian Aqua Air Pty Ltd, the Tribunal held that a costs award could not be based on a party's pre-litigation conduct. That interpretation had not been accepted in a previous Court of Appeal decision - Cripps v G & M Dawson Pty Ltd & Anor [2006] NSWCA 81. The Court held that in relation to the predecessor of s 88, that conduct prior to the proceedings commencing was relevant to determining whether one party should pay the costs of the proceedings. The Department sought to distinguish that case but I can see no basis for doing so.
The Appeal Panel took the same approach in B & L Linings Pty Ltd. I adopt the reasoning and conclusion in that decision in relation to this case. It is also significant that in other statutory contexts involving merits review of government decisions, pre-litigation conduct has been held to be relevant: Lai Qin. It follows that taking into account pre-litigation conduct when determining whether it is fair to award costs, does not constitute an error of law.
The Department effectively "surrendered" in relation to this issue following the filing and service of submissions and evidence. In those circumstances a relevant consideration in determining whether to make an exception to the general rule in relation to costs is whether it is fair to do so having regard to the strength of the Department's case and whether its claim had no tenable basis in fact or law: s 88(1A)(c); B & L Linings Pty Ltd.
Failing to make findings
The Tribunal did not expressly identify the conduct in which the Department had engaged prior to the commencement of litigation. However, it is clear from the reasons that the conduct was the decision to redact certain parts of the report.
At [14] the Tribunal referred to a submission from Ms Schoeman in relation to the application of a principle enunciated in AT v Commissioner of Police [2010] NSWCA 131, but came to no conclusion about that submission:
The applicant relied on AT v Commissioner of Police [2010] NSWCA 131 (at [32]) the Court of Appeal held that in a dispute as to the construction of complex and unclear provisions in a State Act, a State agency should act as a model litigant and may have to bear the costs of its unsuccessful resistance to an application. The applicant contended that the fact that the Tribunal has not made a determination in this matter (due to consent orders being filed) should not detract from the force of the argument that where a State agency unsuccessfully resists an application by an individual in circumstances where there are no settled principles on the construction of State legislation, the obligations on the State agency are such that it may have to bear the applicant's costs.
Although pre-litigation conduct may be relevant when determining whether to award costs, the Tribunal made no findings as to the strength of the Department's case, whether there were 'no settled principles on the construction' of the legislation or whether the Department had not acted as a model litigant.
Despite the fact that the Department filed evidence and submissions in the substantive case which the Tribunal could have taken into account in determining the strength of the Department's case in redacting parts of the Report, the Tribunal did not refer to that evidence. In my view, its failure to do so constitutes an error of law justifying the decision being set aside.
Overlooked matters
The Tribunal mentioned, but did not make findings about two matters which Ms Schoeman submitted were relevant to her application for costs. The first matter was that the Department's foreshadowed Supreme Court challenge to the s 111 referral delayed the resolution of the matter and may have resulted in additional costs. The second matter was that the Department refused to make oral submissions on costs at the Planning Meeting thereby increasing costs relating to the preparation of written submissions.
In addition, while there was no cross-appeal, Ms Schoeman submitted to the Tribunal that it should take into account the fact that the Department had not consulted with third parties about the disclosure of their personal information before the Tribunal directed it do so. The Tribunal did not refer to that submission in its reasons. Ms Schoeman submitted to the Appeal Panel that it cannot be assumed that the Tribunal did not take that submission into account.
The Tribunal's reasons do not disclose whether the Tribunal considered the two matters mentioned but not addressed or the matter of failure to consult until directed to do so. The reasons are inadequate in that respect. A decision will only be set aside where the absence or inadequacy of the reasons discloses that the Tribunal has failed to exercise its powers according to law. In this case, the decision would only be set aside if the Tribunal was bound to consider or ignore those matters: Minister for Aboriginal Affairs v Peko Wallsend Ltd (1986) 162 CLR 24.
Given the breadth of the Tribunal's discretion to take into account the matters listed in s 88(1A) including 'any other matter that the Tribunal considers relevant", the Tribunal was not bound to take into account any of the matters it overlooked. It made no error of law by failing to expressly address those grounds.
Extension to the merits
I have found that the Tribunal made errors of law justifying the decision being set aside. Even if I am wrong, and none of those matters constitutes a legal error, I grant leave for the appeal to extend to the merits of the Tribunal's decision: Lloyd v Veterinary Surgeons Investigating Committee [2005] NSWCA 456 at [60]-[61], [63]). One basis for granting leave for the appeal to extend to the merits is if the Tribunal has gone about its fact finding process in an unorthodox manner or in a manner which is likely to produce an unfair result: K v K [2000] NSWSC 1052 per Young J at [15]. I am satisfied that that is the case in relation to these proceedings.
The remaining question is whether the Appeal Panel should determine the merits of the costs application or whether the matter should be remitted to the Tribunal as originally constituted.
Ms Schoeman submitted that if an error was found, the matter should be remitted to the Tribunal at first instance. The basis for that submission was that the Tribunal Member case managed the matter and she is in a much better position than the Appeal Panel to re-determine the costs application. According to Ms Schoeman, the appropriate order would be to point out any errors which have been made and remit the matter to the Tribunal at first instance to re-determine according to law.
Where there are no issues of primary fact requiring resolution, an appeal body will usually be in as good a position as the decision-maker at first instance to make the relevant judgement as to whether costs should be awarded: AT v Commissioner of Police (NSW) at [28]-[30]. The only issue of primary fact is the strength of the Department's case.
Depending on the matters that the Appeal Panel considers relevant to take into account, it may be necessary to make primary findings of fact. The only matter that I consider relevant to the question of costs is the redacted information matter and the failure of the Department to consult at an early stage. I am in as good a position as the Tribunal at first instance to make primary findings of fact about those matters. There is no advantage in remitting the matter to the Tribunal at first instance. The issue of costs has already resulted in the parties incurring further costs.
Consideration of the merits of the costs application
Principles
When interpreting s 88, the Court of Appeal has emphasised the fact that the general rule is that each party should bear their own costs: AT v Commissioner of Police at [33]. That principle may be displaced where the Tribunal is satisfied that it is fair to do so. The principle that costs should generally not be awarded in merits review cases, where the tribunal stands in the shoes of the primary decision-maker, was endorsed by the Court of Appeal in Thaina Town (On Goulburn) Pty Ltd v City of Sydney Council (2007) 71 NSWLR 230.
In this case, the Tribunal has made consent orders following the filing of evidence and written submissions. In Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622, McHugh J was considering an application for costs in the context where ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Where the matter had settled, McHugh J made the following comment in relation to costs:
In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. . .
Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. . . But such cases are likely to be rare.
Under s 88, success does not generally entitle a party to his or her costs although it is a matter that the Court of Appeal has identified as relevant: AT v Commissioner of Police (NSW) [2010] NSWCA 131 at [32] and [33]. The Court of Appeal has suggested that another relevant matter in relation to government agencies participating in civil litigation is whether they have acted as a "model litigant": at [32].
Relevant matters
The matters that Ms Schoeman put forward, either alone or in combination which were said to justify departure from the general rule were:
(1) the adequacy of search matter;
(2) the lost documents matter, including alleged delay in the process of agreeing to the terms of the notations on the Consent Orders;
(3) the redacted information matter, including failing to consult until directed to do so by the Tribunal;
(4) failure to mediate;
(5) the delay allegedly occasioned by a foreshadowed challenge to a s 111 referral;
(6) failure to agree to make oral submissions on costs at a Planning Meeting.
The only matter that I consider to be relevant is Item 3. Item 1 is not relevant for the reasons given at [33] to [38]. Item 2 is a matter the Tribunal is bound not to take into account for the reasons given at [46] to [48]. The delay in agreeing to the terms of the notation is not relevant because the notations are not orders of the Tribunal and they have no legal effect. Item 4 is not relevant for the reasons given by the Tribunal below at [21] to [23]. I consider the two other matters raised by Ms Schoeman and listed at items 5 and 6 above to be irrelevant to the issue of costs.
The first of those matters was that the Department's foreshadowed Supreme Court challenge to the s 111 referral had delayed the resolution of the matter and may have resulted in additional costs. Ms Schoeman did not identify the additional costs that were incurred as a result of this conduct and I am not aware of any.
The second matter was that the Department refused to make oral submissions on costs at the Planning Meeting thereby increasing costs relating to the preparation of written submissions. A Planning Meeting is not the occasion to make submissions to the Tribunal on costs or any other matter. A Planning Meeting is a case management meeting, not a hearing of the Tribunal. While the Tribunal can make consent orders at a Planning Meeting, any contested issue must be determined either 'on the papers' or at a hearing.
Redacted information and failure to consult at an early stage
One relevant matter to be taken into account in this case is the strength of the Department's case in redacting information from the Report and whether that claim had no tenable basis in fact or law: s 88(1A)(c). If it had no tenable basis in fact or law, it may be concluded that the Department was not acting as a model litigant. Model litigant requirements include endeavouring to avoid litigation wherever possible and not relying on technical defences: NSW Government Model Litigant Policy.
The initial reason that the Department gave when deciding to delete certain passages from the Report was that they contained information obtained in confidence. The Department concluded that the need to protect and encourage the free exchange of information when investigating complaints outweighed Ms Schoeman's right to access the exempt portions of the document.
On 19 April the Department filed detailed submissions defending its decision to redact parts of the Report. The submission acknowledged that under the GIPA Act a person who makes an access application for government information has a legally enforceable right to be provided with access to the information unless there is an overriding public interest against disclosure: GIPA Act, s 9. There is an overriding public interest against disclosure only if there are public interest considerations against disclosure and, on balance, those considerations outweigh the public interest considerations in favour of disclosure: GIPA Act, s 13. An agency may refuse access because it takes the view that there is an overriding public interest against disclosure: s 58(1)(d).
The Department relied on four public interest considerations: prejudice to the supply of confidential information, disclosure of information obtained in confidence, reveal an individual's personal information and contravene an information protection principle. On 20 June 2011, Ms Schoeman filed a detailed statement and submissions in response including that the Department had acted unreasonably in failing to consult with third parties about the disclosure of their personal information prior to the Tribunal directing it do so.
Having read each party's submissions, I am unable to conclude that the Department's case had no tenable basis in law or fact, nor was its case so weak as to justify a costs order. An evaluative judgment needs to be made as to where the public interest lies. Reasonable minds may differ as to where the balance should be struck.
I accept Ms Schoeman's submission that the Department failed to comply with the requirements of the GIPA Act in relation to consultation. In certain circumstances, an agency must take such steps as are reasonably practicable to consult with a person before providing access to information relating to the person: GIPA Act, s 54. The Department did not consult with any of the people whose personal information was contained in the Report until directed to do so by the Tribunal. The Department did not provide an explanation as to why no steps had been taken prior to that time.
While failure to consult is a relevant matter, it does not satisfy me that it is fair in all the circumstances to award costs. In determining whether it is fair to award costs, I have taken into account the history of this matter including that the Department agreed to provide a full copy of the report as soon as the consultation process had been completed. I also accept the Tribunal's understanding of the dispute set out at [22] which was that "the sticking point between the parties was that the respondent was unable to produce the annexures to the report sought by the applicant because, it said, it did not have them." For the reasons given the fact that the documents could not be found does not make it fair to award costs.
Orders
(1) The Tribunal's decision that the Department of Attorney General and Justice is to pay Ms Schoeman's costs is set aside.
(2) The appeal is extended to the merits of the Tribunal's decision.
(3) Ms Schoeman's application for costs is dismissed.
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Decision last updated: 03 August 2012
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