Jainzii Pty Ltd v Chief Executive of Create NSW, an agency of the Department of Creative Industries, Tourism, Hospitality and Sport (No 2)

[2024] NSWSC 1467

Supreme Court

New South Wales

Medium Neutral Citation:

Jainzii Pty Ltd v Chief Executive of Create NSW, an agency of the Department of Creative Industries, Tourism, Hospitality and Sport (No 2) [2024] NSWSC 1467

Hearing dates:

18 October 2024

Date of orders:

21 November 2024

Decision date:

21 November 2024

Jurisdiction:

Common Law

Before:

Schmidt AJ

Decision:

1. Declare that in making the two challenged decisions the State agency, Create NSW, did not afford Jainzii the procedural fairness to which it was entitled, they being:

a) the 12 January 2023 decision to suspend Jainzii’s Creative Kids account; and

b) the 9 March 2023 decision to refuse to reimburse 1587 vouchers Jainzii had earlier redeemed under the Creative Kids scheme and to suspend its registration as a provider under that scheme.

2 Order that:

a) time for the commencement of these proceedings is extended to 21 July 2023, when the summons was filed;

b) the two challenged decisions be set aside; and

c) the defendants are to bear Jainzii’s costs, as agreed or assessed.

Catchwords:

FINAL ORDERS – proposed orders – where parties disagreed about proposed orders – usual costs order – costs follow the event – whether claim was dominant or separable – costs thrown away order

Legislation Cited:

Civil Procedure Act2005 (NSW), s 98

Cases Cited:

Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304

Taylor v Stav Investments Pty Ltd as trustee for the Stav Investments Family Trust (No 2); Taylor v LK Group Investments Pty Ltd (No 2) [2023] NSWCA 322

Texts Cited:

Nil

Category:

Costs

Parties:

Jainzii Pty Ltd (Plaintiff)
Chief Executive of Create NSW, an agency of the Department of Enterprise, Industry and Trade (First Defendant)
State of NSW (Second Defendant)

Representation:

Counsel:
M Heath (Plaintiff)
T Liu (First and Second Defendants)

Solicitors:
Morris Succession Lawyers (Plaintiff)
McCullough Robertson Lawyers (First and Second Defendants)

File Number(s):

2023/232758

Publication restriction:

Nil

JUDGMENT

1. In October 2024 I gave judgment for Jainzii on an application for judicial review of two decisions made by Create NSW, an agency of the Department of Creative Industries, Tourism, Hospitality and Sport, which operated a State government funded scheme known as “Creative Kids”, which resulted in the suspension of its account and the refusal to pay it some $158,700 which it claimed it was owed under the scheme.

2. The parties do not agree on the terms of the final orders to be made, including as to costs.

3. The orders Jainzii proposed were:

“1. Order pursuant to Rule 59.10 (2) of the UCPR that time for the commencement of these proceedings be extended to the date of filing of the Summons on 21 July 2023.

2. An order pursuant to s69 of the Supreme Court Act (170 (NSW), that the decision of the First Defendant made on 12 January 2023 to suspend the Plaintiff’s account as part of its participation as a registered ‘provider’ of the Second Defendant’s program known as “Creative Kids” (the Program) administered by the First Defendant. (The First decision) is set aside.

3. An order pursuant to s69 of the Supreme Court Act (1970 (NSW) that the decision of the First Defendant, made on 9 March 2023 to:

a.   Refuse to reimburse, the Plaintiff for 1587 vouchers redeemed in respect of the Program; and

b.    Suspend the Plaintiff’s registration as a ‘provider’ for the Program;

is set aside. (the Second Decision)

4.   Order that the Relief sought in prayers 1, 2, & 4 of Schedule A to the Plaintiff’s Further Amended Summons filed 8 March 2024 is refused.

5.   Order that the Defendants pay the Plaintiff’s costs or the proceedings as agreed or assessed.”

4. Those proposed by Create NSW were:

“1 Order pursuant to Rule 59.10 (2) of the UCPR that time for the commencement of these proceedings be extended to the date of filing of the Summons on 21 July 2023.

2.   The Court declares that:

a.   In making the “First Decision”, the First Defendant did not afford the Plaintiff procedural fairness.

b.   In making the “Second Decision”, the First Defendant did not afford the Plaintiff procedural fairness.

3.   Order that the Relief sought in the Points of Claim at Schedule A to the Plaintiff’s Further Amended Summons filed 8 March 2024 is refused.

4.   Each party bears its own costs.”

Orders

5. I am satisfied that the declarations and orders which properly reflect the conclusions reached in the October judgment, for the reasons there given, are:

“1.   Time for the commencement of these proceedings is extended to 21 July 2023, when the summons was filed;

2   The State agency Create NSW did not afford Jainzii the procedural fairness to which it was entitled when making the two challenged decisions, namely:

(a)   the 12 January 2023 decision to suspend Jainzii’s “Creative Kids” account; and

(b)   the 9 March 2023 decision to refuse to reimburse 1587 vouchers Jainzii had redeemed under the Creative Kids scheme and to suspend its registration as a provider under that scheme

1. 3.   The two challenged decisions be set aside.”

Costs

6. I have also concluded that no basis for a departure from the usual costs order under the Uniform Civil Procedure Rules 2005 (NSW), that costs follow the event, has been established: r 42.

7. Jainzii’s case was that there should be no departure from the usual order.

8. Create NSW opposed this, contending that the appropriate costs order, given the conclusions reached in the October judgment, was that each party bear its own costs. That reflecting that Jainzii had not succeeded on its estoppel case.

9. Reliance was also placed on the costs orders made on the motion by which Jainzii’s estoppel claim was added, to which Create NSW finally consented, Jainzii having agreed to a costs thrown away order.

10. There was no issue about the Court’s power to make any of the costs orders sought, or the applicable principles: s 98 Civil Procedure Act2005 (NSW).

11. In Taylor v Stav Investments Pty Ltd as trustee for the Stav Investments Family Trust (No 2); Taylor v LK Group Investments Pty Ltd (No 2) [2023] NSWCA 322 at [7], the applicable principles explained in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38] were referred to:

“Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported).

In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. A similar approach is adopted on appeal.

If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue: Sydney City Council v Geftlick & Ors (No 2) [2006] NSWCA 374 at [27].

Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: State of New South Wales v Stanley [2007] NSWCA 330 at [18] per Hislop J (with whom Beazley and Tobias JJA agreed).

A separable issue can relate to “any disputed question of fact or law” before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34].

Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation: James v Surf Road Nominees Pty Ltd (No 2), citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272.”

12. Despite the outcome of the estoppel claim, I am not persuaded that there should be any departure from the usual costs order in this case.

13. Ms Worthing addressed the basis of all of Jainzii’s claims in her evidence, but the pursuit of the estoppel claim added but little to what arose to be considered on the cases which the parties advanced, with the result that the matter was heard within a day, having been listed for two.

14. The evidence concerned the Create NSW scheme, how it had been established and operated, so far as Jainzii was concerned, how the challenged decisions came to be made and communicated, as well as their results, given how Jainzi responded. That was met by the evidence which Create NSW relied on.

15. The estoppel claim turned on reliance. For reasons explained in the October judgment that was not established by Ms Worthing’s evidence.

16. While the estoppel claim was not established by that evidence, still it had to be accepted that Jainzii had not been given the procedural fairness to which it was entitled. The result was that the two challenged decisions had to be set aside, given how they had deprived it not only of payment for the vouchers it had earlier been notified would be paid, but also the suspension of its right to continue as a provider under the scheme.

17. In the result I am unable to conclude that the estoppel claim was either clearly dominant, or separable. That was implicitly accepted by Create NSW’s case that each party should bear its own costs, given the difficulty of separately assessing the costs of the estoppel claim.

18. I am unable to accept that this would reflect a just exercise of the costs discretion, given all the circumstances which have to be considered. They including, of course, the conclusions which had to be reached about the procedural fairness to which Jainzi was entitled and did not receive. I am thus not satisfied that the order Create NSW urged can properly be made.

19. Nor am I satisfied that there is any just basis for refusing to award Jainzii the usual costs of the proceedings in which it succeeded as it did and attempting the difficult exercise of differentiating between the costs of the particular issues on which Jainzii succeeded and that on which it failed, given the evidence on which those issues turned.

20. In the result I am satisfied that there should be no departure from the usual order.

Final orders:

21. For these reasons I:

1. declare that in making the two challenged decisions the State agency, Create NSW, did not afford Jainzii the procedural fairness to which it was entitled, they being:

1. the 12 January 2023 decision to suspend Jainzii’s Creative Kids account; and

2. the 9 March 2023 decision to refuse to reimburse 1587 vouchers Jainzii had earlier redeemed under the Creative Kids scheme and to suspend its registration as a provider under that scheme.

2. order that:

1. time for the commencement of these proceedings is extended to 21 July 2023, when the summons was filed;

2. the two challenged decisions be set aside; and

3. the defendants are to bear Jainzii’s costs, as agreed or assessed.

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Decision last updated: 21 November 2024