Henry v Commissioner of Fair Trading

[2007] NSWADT 261

CITATION:	Henry v Commissioner of Fair Trading [2007] NSWADT 261
DIVISION:	General Division
PARTIES:	APPLICANT Christopher Frank Henry RESPONDENT Commissioner for Fair Trading
FILE NUMBER:	073057
HEARING DATES:	On the papers
SUBMISSIONS CLOSED:	14 August 2007
DATE OF DECISION:	6 November 2007
BEFORE:	Higgins S - Judicial Member
CATCHWORDS:	Costs
MATTER FOR DECISION:	Costs
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Home Building Act 1989
CASES CITED:	Gizah Pty Ltd v AXA Trustees Limited (No. 2) [2001] NSWADT 164 at [29] Brooks Maher v Cheung [2001] NSWADT 18 at [11] Hutchings Electrical v Director General, Department of Fair Trading (No. 2) [2002] NSWADT 255 at [18] Raethel v Director-General, Department of Education & Training [2000] NSWADT 56 at [56] – [58]
REPRESENTATION:	E Olsson SC G Griswald, solicitior
ORDERS:	The Commissioner to pay one third of Mr Henry’s legal costs, as assessed or agreed, up to and including the hearing of his application on 17 July 2007

Introduction

1 On 14 August 2007, at the conclusion of the hearing of Mr Henry’s substantive application I made orders setting aside the decision of the Commissioner to refuse Mr Henry’s application for a contractor licence, for the work category of fencing, pursuant to the Home Building Act 1989. In substitution of that decision I made a decision to grant Mr Henry a contractor licence subject to conditions.

2 At the hearing Mr Henry had also made an application for costs pursuant to s.88 of the Administrative Decisions Tribunal Act 1997 (‘the ADT Act’). I reserved my decision in regard to that application. These are my reasons for the decision in regard to that application.

Principles governing costs

3 The Tribunal has no inherent power to award costs. As mentioned above, its power to award costs is set out in s.88 of the ADT Act which relevantly provides that ‘the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that there are special circumstances warranting an award of costs’.

4 This power is a discretionary power and in order to obtain a cost order an applicant has two hurdles to overcome. The first hurdle is to satisfy the tribunal that there are ‘special circumstances’ and the second hurdle is to satisfy the tribunal that these circumstances warrant an award of costs: see Gizah Pty Ltd v AXA Trustees Limited (No. 2) [2001] NSWADT 164 at [29].

5 ‘Special circumstances’ have been defined as ‘circumstances that are out of the ordinary, but without having to be extraordinary or exceptional’. It is well established that mere success in a review application does not constitute special circumstances: see Brooks Maher v Cheung [2001] NSWADT 18 at [11] and Hutchings Electrical v Director General, Department of Fair Trading (No. 2) [2002] NSWADT 255 at [18]. In Brooks the Tribunal noted that while the circumstances which would or would not warrant an award of costs could not be exhaustively listed, ‘…where one party causes another party to incur costs because of unreasonable delays, or by making misconceived, frivolous, vexatious or insubstantial procedural or substantive applications, an award of costs may be warranted’.

6 The power to order costs should not be used as ‘some kind of sanction to punish agencies for poor administration’, and the tribunal should not embark on ‘a general enquiry into the way in which the agency dealt with the Applicant’: Raethel v Director-General, Department of Education & Training [2000] NSWADT 56 at [56] – [58].

7 Practice Note 12 (reissued on 11 May 2005) provides that ‘special circumstances’ which may warrant an order for costs under s.88(1) of the ADT Act are where ‘a party has conducted the proceedings in the way that disadvantaged another party to the proceedings’. It cites the following examples of such conduct:

‘(i) failure to comply with an order or direction of the Tribunal without reasonable excuse,

(ii) failing to comply with this Act, the regulations, the rules or enabling enactment,

iii) asking for an adjournment as a result of (i) or (ii),

(iv) causing an adjournment,

(v) attempting to deceive another party or the Tribunal,

(vi) vexatiously conducting the proceedings,

(vii) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, and

(viii) 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.’

8 The essence of Mr Henry’s argument is that the Commissioner has vexatiously conducted proceedings and has otherwise conducted himself, through his officers, in a manner that has disadvantaged Mr Henry and his business.

9 The proceedings which Mr Henry asserts were conducted vexatiously are those brought by the Commissioner in regard to his glass pool fencing work. Penalty notices were issued in regard to this category of work undertaken by Mr Henry during 2005 and 2006. The charge being that his contractor licence did not authorise him doing such work. Mr Henry was subsequently convicted, in his absence, of this charge.

10 In deciding to refuse Mr Henry his licence application, the Commissioner relied on the substance of the charge and it was not until shortly before commencement of the hearing of Mr Henry’s application before the tribunal that the Commissioner acknowledged that Home Building Regulation at the relevant time did not provide for a special category of glass fencing work and that the work undertaken by Mr Henry was in fact authorised by his licence. Mr Henry inferred that that the convictions were knowingly obtained on an improper basis and that officers of the Commissioner had deliberately targeted at him and in doing so had acted with malice.

11 The Commissioner denied any wrong doing or bad faith in that the penalty notice was issued on the mistaken belief of the investigator that such a requirement, which did in fact exist prior to 2002, was still in force. That is ‘it was simply a mistake based on previous practice’ and once the error was noticed the Commissioner ceased pressing this ground, but continued to rely on the other matters for which Mr Henry was convicted (i.e. breach of the maximum deposit requirement).

12 As indicated in my reasons for decision in the substantive review application I accepted the evidence of Mr McIntyre, the Commissioner’s investigator, in that he believed that such a requirement continued to exist. I also accept that there is no evidence of malice on the part of Mr McIntyre in issuing the penalty notices etc. At the same time, as I have already stated, it was incumbent on him to ensure that he knew what the legislative requirements were and his failure to do so has meant that a decision to refuse Mr Henry his application for a licence was in part improperly based. This is particularly so as 5 of the 9 complaints relied on by the Commissioner were complaints about glass pool fences Mr Henry had built or a contractor had built on his behalf. These complaints were also recent and in my opinion an assertion that a person does work which he/she is not licensed to carry out is a very serious matter and one for which the Commissioner is bound to take action in order to protect consumers. The evidence is that the Commissioner was of a similar view and considered the alleged contravention as one of the main factors in determining to refuse his application.

13 Consequently, the Commissioner’s decision was erroneous in part and the error was made to the disadvantage of Mr Henry, who was refused a licence for some time partly on the basis of this error. Even though there were other offences for which Mr Henry had been convicted and the number of complaints were the same, these all related to work he was in fact authorised to do under his then existing contractor licence. Although the Commissioner, on realising the error did not press this contravention as a ground of refusal at the hearing, Mr Henry had effectively been required to prepare his case in order to meet this very serious allegation when he should not have been required to do so.

14 Having regard to the history of Mr Henry’s application before the tribunal I am satisfied that the conduct of the Commissioner in regard to the erroneous charges disadvantaged Mr Henry and constituted ‘special circumstances’ for the purpose of s.88 of the ADT Act.

15 Mr Henry also asserted that the cancellation of his previous licence had been unlawful, that he had endured public humiliation on Radio 2GB and through a media release issued by the Minister, that the Commissioner took two months to determine his fresh application for a licence and then took a further five months to provide his reasons for decision and particulars of complaint and that the complaints relied on by the Commissioner had been resolved before or immediately after the investigation by Mr McIntyre.

16 I agree with the submissions of the Commissioner that the fact of cancellation of Mr Henry’s previous licence is not a relevant matter for the purpose of this cost application as this relates to a decision that was not the subject of review in the substantive decision and it related to the manner in which the Commissioner had dealt with Mr Henry prior to the commencement of these proceedings: see Raethel (supra). The same applies to the period during which the Commissioner took to consider Mr Henry’s application and make the internal review decision in that it occurred prior to the commencement of these proceedings.

17 However, it would appear that factors taken into account when Mr Henry’s licence was cancelled/not renewed were also factors considered for the purpose of refusing his new application for a licence. If this is correct then these factors remain relevant for the purpose of this application. The erroneous assumption of what work Mr Henry was authorised to do being one of them.

18 For the reasons I have already stated, I do not accept the inference that Mr Henry seeks to draw from the assertion that Mr McIntyre conducted an investigation after complaints had been resolved. Nor is the warning issued by the Minister and the Radio 2GB program matters relevant to the jurisdiction of the tribunal.

Do the special circumstances warrant an order for costs?

19 In my opinion the special circumstances in this application do warrant an order for costs. However, that order should be reflective of the fact that there were matters of genuine concern about Mr Henry and how he had operated his business as a licensed contractor. Mr Henry acknowledged that he had taken his eye off the ball as his business expanded and he was required to rely on others to do the work he contracted to do. He also acknowledged that he was unfamiliar with the maximum deposit and the form of written contract requirements under the Home Building Act 1989. These are not merely technical requirements and as I explained during the hearing of the substantive application it is incumbent on Mr Henry to be familiar with these and abide by them.

20 At the same time it is difficult to ascertain how much of the material and time taken at hearing and preparation for hearing was attributable to the erroneous conviction. Although some time was taken up on this issue at the commencement of the hearing on 17 July 2007, it was very small. However, as explained above, I have accepted that it took up some time in Mr Henry’s preparation for the hearing.

21 Having regard to all the circumstances, the appropriate order is that the Commissioner be required to pay one third of Mr Henry’s legal costs, as assessed or agreed, up to and including the hearing of his application on 17 July 2007.