Initiative Holdings Pty Ltd ACN 008 560 521 v The Australian Law Company Pty Ltd ACN 606 972 196 (Civil Dispute)

[2019] ACAT 85

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

INITIATIVE HOLDINGS PTY LTD ACN 008 560 521 v THE AUSTRALIAN LAW COMPANY PTY LTD ACN 606 972 196 (Civil Dispute) [2019] ACAT 85

XD 19/2019

Catchwords:                CIVIL DISPUTE – the right to discontinue proceedings – whether discontinuance per se attracts costs – circumstances in which costs can be ordered – the role of ACAT as a cost free and informal tribunal – access to justice

Legislation cited:        ACT Civil and Administrative Tribunal Act 2008 ss 32, 48, 56

Subordinate

Legislation cited:        ACT Civil and Administrative Tribunal Procedure Rules 2009 (No2) r 9

ACT Civil and Administrative Tribunal Procedural Directions 2010 (No 1) s 24.1
Court Procedure Rules 2006 rr 1160, 1163, 1165

Cases cited:Carew-Neill v Bower [2016] ACAT 54

CIC Australia Ltd v ACT Planning and Land Authority & Ors [2013] ACTSC 96
Eather v Health Care Complaints Commission [2017] NSWCATOD 42
Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45
Smith v J&C Whyte Family Trust [2016] ACAT 132

Tribunal:  Senior Member A Anforth

Date of Orders:  18 September 2019

Date of Reasons for Decision:     18 September 2019

AUSTRALIAN CAPITAL TERRITORY  )

CIVIL & ADMINISTRATIVE TRIBUNAL       )          XD 19/2019

BETWEEN:

INITIATIVE HOLDINGS PTY LTD

ACN 008 860 521

Applicant

AND:

THE AUSTRALIAN LAW COMPANY PTY LTD

ACN 606 972 196

Respondent

TRIBUNAL:Senior Member A Anforth

DATE:18 September 2019

ORDER

The Tribunal orders that:

1.The respondent’s application for costs is dismissed.

2.The applicant’s application being discontinued is dismissed.

………………………………..

Senior Member A Anforth

REASONS FOR DECISION

1.On 11 January 2019 the applicant filed an application in the Tribunal seeking orders for the return of certain items of property valued at $157.

2.On 15 February 2019 the respondent filed a response denying the claim and seeking summary judgment in its favour, or in the alternative seeking an order that the application be dismissed under section 32 of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act), and costs under section 48(1) of the ACAT Act.

3.On 26 March 2019 the applicant filed submissions opposing the respondent’s application for summary dismissal.

4.The matter was listed for conferences within the Tribunal on 1 April 2019, 29 May 2019 and 4 June 2019, none of which occurred. The matter was listed for hearing on 28 June 2019.

5.On 26 June 2019 the applicant filed a notice of discontinuance. The applicant informed the Registrar that the matter was being moved to the Federal Court.

6.On 27 June 2019 the respondent communicated with the Registrar and indicated its wish to pursue an order for costs consequential to the applicant’s discontinuance.

7.The 28 June 2019 the Tribunal heard the application for costs. Mr Colquhoun, solicitor, of Nelson & Co appeared for the applicant and Ms Taylor, solicitor, of Aulich Lawyers appeared for the respondent.

8.The respondent sought to persuade the Tribunal that it had power to:

(a)decline to accept the notice of discontinuance and then summarily dismiss the original application with costs; or

(b)order costs on the discontinuance.

9.There was discussion on the power of the Tribunal to:

(a)decline to accept a notice of discontinuance; and

(b)summarily dismiss the application as being frivolous, vexatious or abusive without having heard any of the evidence.

10.The respondent argued that the applicant’s decision to discontinue the application was of itself sufficient evidence that it was frivolous, vexatious or abusive. The applicant said the detention of goods application was being moved to the Federal Court as part of wider proceedings between the same parties arising out related dealings.

11.The respondent suggested that the Tribunal could require the original application to proceed to hearing for the sole purpose of determining whether it should be dismissed as frivolous, vexatious or abusive. The Tribunal made it plain that this process was beyond its powers and would otherwise be an unjustified waste of resources for all concerned.

12.The respondent said that the discontinuance produced an unfairness to the respondent because of the costs that the respondent has occurred to that point in time.

13.In deference to the respondent’s concerns the Tribunal reserved the matter for decision and issued a timetable for the filing of final submissions.

14.In its final submissions the respondent argued:

(a)the Tribunal had power under rule 9 of the ACT Civil and Administrative Tribunal Procedure Rules 2009 (No2) (the Rules) and section 56(d) ACAT Act to ‘reject’ the applicant’s notice of discontinuance; and

(b)the applicant’s original application should then be dismissed under section 32(2)(b) with costs under section 48(2) ACAT Act.

15.Rule 9 provides:

9      Rejecting documents—abuse of process etc

(1)     This rule applies if a document lodged with the tribunal appears to the registrar on its face to be an abuse of the tribunal’s process or to be frivolous or vexatious. (emphasis added)

(2)     The registrar may—

(a)reject the document; or

(b)refer the document to the tribunal for directions about how to deal with it.

(3)     If the registrar refers the document to the tribunal, the tribunal may direct the registrar to—

(a)accept the document; or

(b)reject the document.

16.The respondent argued that the notice of discontinuance was not self-executing as evidenced by the fact that the matter was listed at the respondent’s request to consider its costs argument.

17.The respondent took the view that the Registrar had referred the matter to the Tribunal under rule 9 on the basis the notice of discontinuance was an abuse of process or frivolous and vexatious. This is factually not the case. There was no such referral by the Registrar. The matter was listed by the Registrar before the Tribunal at the request of the respondent as a matter of courtesy to allow the respondent to be heard.

18.The respondent submitted that the abuse of process resided in the later timing of the discontinuance and the deprivation of its costs.

19.The respondent contended that the Tribunal could dismiss the original application under section 56(d) of the ACAT Act, which provides:

56     Other actions by the tribunal

The tribunal may, by order—

…

(d)     take any other action in relation to an application—

(i)that the tribunal considers appropriate; and

(ii)that is consistent with this Act or an authorising law.

Examples

1an order dismissing a proceeding on the withdrawal of the applicant

2an order dismissing a proceeding for want of prosecution

Note 1The tribunal must observe natural justice and procedural fairness (see s 7).

Note 2A reference to an Act includes a reference to the statutory instruments made or in force under the Act, including regulations (see Legislation Act, s 104).

20.The respondent relied upon Eather v Health Care Complaints Commission [2017] NSWCATOD 42. The Tribunal observes that this decision was determined on very different procedural and cost rules that has little relevance to the present case.

21.The respondent contended that the Tribunal could decline to reject the discontinuance and then dismiss the original application under section 32 of the ACAT Act, which provides:

32Dismissing or striking out applications

(1)     This section applies if the tribunal considers that an application, or part of an application is––

(a)frivolous or vexatious; or

(b)lacking in substance; or

(c)otherwise an abuse of process; or

(d)made by a person who has been dealt with by a court or tribunal in Australia as frivolous or vexatious.

(2)     The tribunal may, by order, do 1 or more of the following:

(a)refuse to hear the application or part of the application;

(b)dismiss the application or part of the application;

…

22.The original application had not progressed to the point that any evidence had been heard. The respondent argued that the fact of discontinuing was itself evidence that the applicant’s claim was lacking in substance within the meaning of section 32(1)(b), or was frivolous or vexatious within the meaning of section 31(1)(a).

23.The respondent argued that costs could be awarded pursuant to section 48 ACAT Act, which provides:

48     Costs of proceedings

(1)     The parties to an application must bear their own costs unless this Act or another territory law otherwise provides or the tribunal otherwise orders.

(2)     However-

…

(b)If the tribunal considers that a party to an application caused unreasonable delay or obstruction before or while the tribunal was dealing with the application—the tribunal may order the party to pay the reasonable costs of the other party arising from the delay or obstructions.

24.The respondent relied upon Smith v J&C Whyte Family Trust [2016] ACAT 132 (Smith) to the effect that costs could be awarded where one party had failed to bring their “…dispute to the table as quickly as practicable with all of the relevant facts, evidence and arguments laid bare so that the dispute can be resolved as quickly and inexpensively as the case permits…”[1] The Tribunal notes that this passage from Smith was proceeded by the tribunal defining its understanding of ‘unreasonable delay or obstruction’ as “sharp practice, withhold relevant information, half-truth, ambush, surprise or delay.”[2]

[1] [2016] ACAT 132 at [127]

[2] Ibid

25.The respondent cited Carew-Neill v Bower [2016] ACAT 54 as support for the proposition that proceedings commenced for an ulterior motive or without consideration of the merits of a claim, should attract the discretion under section 48(2)(b).

26.On 12 July 2019 the applicant filed its final submissions. The applicant argued:

(a)rule 24.1 of the Rules[3] provides a power for an applicant to discontinue proceedings that did not require any leave of the Tribunal; and

(b)there was no abuse of process in discontinuing in the tribunal to commence in the Federal Court, which had already been filed in the Federal Court.

Consideration of the issues

[3] This was misquoted by the applicant in their submissions. Section 24.1 is actually from the ACT Civil and Administrative Tribunal Procedural Directions 2010 (No 1), not the Rules.

27.Discontinuance after a hearing date has been fixed will generally attract an order for costs under rules 1160, 1163 and 1165 of the Court Procedures Rules 2006 (CPR). Leave is required to discontinue, and that leave may be withheld where the litigation was frivolous, vexatious or an abuse of process. The CPR do not apply to ACAT and were not intended to apply.

28.There was no referral of the notice of discontinuance by the Registrar under rule 9, therefore that rule has no application.

29.It is not possible for the Tribunal to determine whether the original application was without merit or brought for an ulterior motive etc. There is no abuse in moving the detention of goods application to the Federal Court as part of wider proceedings between the parties. The Anshun principles[4] suggest that it is entirely correct to adopt this approach.

[4] Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45

30.There is no evidence that the value of the allegedly detained goods exceeded the monetary jurisdictional limits of the tribunal.

31.The power in section 48 to award costs is limited to the circumstances set out in section 48(2).[5] The respondent must show that the applicant’s discontinuance amounts to a ‘delay’ or ‘obstruction’ of the hearing. Discontinuance obviates the need for the hearing, it does not delay or obstruct it.

[5] CIC Australia Ltd v ACT Planning and Land Authority & Ors [2013] ACTSC 96

32.The only thing unusual in this case is that the notice of discontinuance was filed two days before the hearing. There might be circumstances where a last-minute discontinuance may point to abuse or be indicative of a lack of merit, but some other evidential support would be required for this. The timing of the discontinuance per se would not permit this inference. In the present case the applicant has explained and provided evidence in support of its motivation for the discontinuance which seem appropriate in the circumstances.

33.There is a fundamental logical problem with the respondent’s argument. ACAT is a cost-free jurisdiction and was deliberately set up to be so. The issue of lawyer’s costs is one of the main barriers to access to justice. If the present matter had proceeded to hearing and assume the respondent had won, the respondent would still not have obtained its costs under section 48(2). For this reason, the discontinuance has not deprived the respondent of any right it would have had at the conclusion of contested hearing.

34.The respondent’s approach is one that seeks to assimilate ACAT into the judicial paradigm of the courts. This outcome might be good for the wealth of lawyers, but it would defeat the legislative intent of promoting access to justice through a cost free and informal tribunal.

35.If there are lawyers acting for both parties in a matter before the Tribunal who are concerned about their costs, then there is no reason why they cannot enter a private agreement to run the matter in ACAT and for the loser to pay the winners costs. This approach would not do violence to the rights of ordinary people who cannot afford and have not retained lawyers.

36.The respondent’s application for costs is dismissed, and the original application being discontinued is dismissed.

……………………………..

Senior Member A Anforth

HEARING DETAILS

FILE NUMBER:	XD 19/2019
PARTIES, APPLICANT:	Initiative Holdings Pty Ltd ACN 008 560 521
PARTIES, RESPONDENT:	The Australian Law Company Pty Ltd ACN 606 972 196
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	Nelson & Co Solicitors
SOLICITORS FOR RESPONDENT	Aulich Civil Law
TRIBUNAL MEMBERS:	Senior Member A Anforth
DATES OF HEARING:	28 June 2019