Joys Child Care Limited v Secretary, Department of Education

[2017] NSWCATAD 340

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Joys Child Care Limited v Secretary, Department of Education [2017] NSWCATAD 340
Hearing dates:	On the papers
Date of orders:	21 November 2017
Decision date:	21 November 2017
Jurisdiction:	Administrative and Equal Opportunity Division
Before:	Dr J Lucy, Senior Member
Decision:	(1) A hearing on the respondent’s costs application is dispensed with. (2) The applicant is to pay the respondent’s costs, from 9 June 2017 to 9 August 2017, which are referable to the preparation of the matter for final hearing, such costs, if not agreed, to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014).
Catchwords:	ADMINISTRATIVE LAW – COSTS – Where applicant withdrew application at 5pm on day before four day hearing – Where applicant had represented to respondent six days before that hearing would proceed – Where applicant had failed to comply with Tribunal’s directions to file and serve submissions and evidence – Whether special circumstances existed warranting an order for costs
Legislation Cited:	Children (Education and Care Services) National Law (NSW) Administrative Decisions Review Act 1997 (NSW) Civil and Administrative Tribunal Act 2013 (NSW) Community Services (Complaints, Reviews and Monitoring) Act 1993 (NSW)
Cases Cited:	DBU v Secretary, Department of Education [2017] NSWCATAD 257 CPD Holdings v Baguley [2016] NSWCATAP 160 CYU v Secretary, Department of Education [2017] NSWCATAD 290
Category:	Costs
Parties:	Joys Child Care Limited (Applicant) Secretary, Department of Education (Respondent)
Representation:	Counsel: C Lenehan (Respondent)   Solicitors: J Shang (Applicant) NSW Crown Solicitor’s Office (Respondent)
File Number(s):	2017/00127216 and 2017/00085483
Publication restriction:	None

REASONS FOR DECISION

1. This is an application for costs, by a regulator, in circumstances where the corporate applicant withdrew its applications for review of the regulator’s decisions on the eve of a four day hearing.

2. I have found that there are special circumstances warranting an award of costs. These include the applicant’s failure to comply with the Tribunal’s directions to prepare evidence and submissions, its representation less than a week before the hearing that it would proceed with the hearing, and its withdrawal of the applications with inadequate notice and no sufficient explanation.

3. I have decided to grant the regulator’s application for costs in part.

Background

4. The applicant sought review in the Tribunal of a decision of the respondent (“the Secretary”) to suspend its provider approval under s 28 of the Children (Education and Care Services) National Law (NSW) (“the National Law”) (proceedings 2017/85483).

5. The applicant then sought review in the Tribunal of a later decision of the Secretary to cancel its provider approval under s 33 of the National Law (proceedings 2017/127216).

6. On 24 April 2017, the Secretary filed a significant amount of affidavit evidence.

7. The Secretary made an unsuccessful application for interim relief in the form of an order that the applicant is not to provide any education and care service, pending the determination of the proceedings. That application was heard and determined on 2 May 2017.

8. On 25 May 2017, the parties attended a directions hearing. Mr Frommer attended that directions hearing as legal representative of the Secretary. Mr Frommer’s unchallenged evidence, which I accept, is that Mr Shang, a director of the applicant, stated at the directions hearing that he was unable to indicate how long he would require to file evidence without first speaking to his community legal representative. As a result, the matter was listed for further directions on 8 June 2017.

9. On 1 June 2017, the Secretary filed and served documents in the nature of documents under s 58 of the Administrative Decisions Review Act 1997 (NSW). (As that Act does not apply to matters under the National Law, the obligations in that section do not strictly apply: see CYU v Secretary, Department of Education [2017] NSWCATAD 290 at [15] to [18] and DBU v Secretary, Department of Education [2017] NSWCATAD 257 at [8] to [26]).

10. On 8 June 2017, the parties attended a directions hearing before me. As Mr Frommer has stated in evidence, at that directions hearing Mr Shang requested that no orders in respect of timetabling be made until the Supreme Court handed down its decision in related proceedings, and that the matters not be heard until at least late September 2017. The reason provided for this proposed time frame was that Mr Shang had to travel and was busy with other legal matters.

11. I made orders requiring the applicant to file and serve evidence by 30 June 2017, the Secretary to file and serve evidence by 17 July 2017 and to file and serve a summary of legal arguments by 26 July 2017, and the applicant to file and serve a summary of legal arguments by 2 August 2017. I set the matter down for a four-day hearing commencing on 9 August 2017.

12. On 30 June 2017, Mr Shang emailed the Tribunal registry, in an email copied to Mr Frommer, requesting that the Tribunal vacate the hearing dates and find later dates. The Registrar replied to the email, copying in Mr Frommer, stating that his application for an extension of time to file evidence was not approved, and that the timetable remained as ordered by the Tribunal on 8 June 2017.

13. On 25 July 2017, the Secretary filed further affidavit evidence and, on 31 July 2017, the Secretary filed detailed submissions prepared by counsel. The submissions noted that Mr Shang had not served any evidence or indicated which witnesses he required for cross examination.

14. At 5pm on 8 August 2017, the applicant withdrew the application by email from Mr Shang to the Tribunal Registrar, copied to Mr Frommer. Mr Shang stated in the email that the withdrawal was “[i]n light of the confirmation from the Secretary of the Department of Education.” The email then set out a paragraph of a “without prejudice” letter sent by the Crown Solicitor (as legal representative of the Secretary) to Mr Shang on 7 July 2017, and attached the letter. Mr Shang concluded by informing the Registrar that Mr Shang would make new applications for a provider approval and service approval in the coming week.

15. The applicant should not have provided a “without prejudice” letter to the Tribunal (see Civil and Administrative Tribunal Act 2013 (NSW) (“NCAT Act”), s 67(1)), as that letter was privileged. However, in circumstances where the applicant had done so, the Secretary did not object to the Tribunal having regard to the letter for the purposes of the costs application.

16. The “without prejudice” letter from the Crown Solicitor to Mr Shang sought the applicant’s agreement to certain terms of settlement. The letter stated that the Secretary would consider any application made under the National Law by Mr Shang or Joys Child Care Ltd according to law, in good faith and without bias or prejudgment. This is the “confirmation” to which Mr Shang’s email referred.

17. On 9 August 2017, when the hearing was scheduled to begin, the Secretary’s legal representatives appeared but there was no appearance for the applicant. The Secretary sought costs. I made orders for the parties to provide evidence and submissions on the costs application and submissions as to whether an order should be made under s 64 of the NCAT Act prohibiting the disclosure of the applicant’s name. I also invited submissions as to whether the matter should be determined on the papers.

18. The Secretary filed and served evidence and submissions in accordance with these directions, but the applicant did not do so.

Non-publication order

19. The Tribunal’s registry has routinely anonymised the names of applicants in matters under the National Law. The applicant’s name was anonymised in accordance with this practice.

20. Applications under the National Law are not applications under the Community Services (Complaints, Reviews and Monitoring) Act 1993 (NSW): see DBU v Secretary, Department of Education [2017] NSWCATAD 257 at [20]-[23]. Accordingly, s 65 of the NCAT Act does not apply to them.

21. The applicant has not applied for a confidentiality order under s 64 of the NCAT Act or made submissions in support of remaining anonymised. The Secretary takes no position on the issue.

22. I am not satisfied that it is desirable to make any orders under s 64 in this case, and decline to do so.

Decision on the papers

23. The Secretary submits that the costs application should be determined on the papers. The Secretary says that it is a straightforward application that does not involve matters such as the credibility of witnesses or complex argument that is more conveniently conducted orally.

24. I agree.

25. I am satisfied that the issues for determination can be adequately determined in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Tribunal (NCAT Act, s 50(2)). Accordingly, I make an order dispensing with a hearing.

Costs application

26. The Secretary seeks an order that the applicant pay the Secretary’s costs referable to the preparation of the matter for final hearing, including the directions hearings on 25 May 2017 and 8 June 2017.

27. The standard rule in the Tribunal is that each party is to pay the party’s own costs: NCAT Act, s 60(1). The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs: NCAT Act, s 60(2). A range of matters, to which the Tribunal may have regard when determining whether there are special circumstances, is set out in s 60(3).

28. Mr Frommer gave the following evidence relevant to the costs application, which the Tribunal accepts.

29. Mr Shang did not file or serve any evidence in the substantive application.

30. Following a judgment in the Supreme Court on 3 August 2017, Mr Frommer spoke to Mr Shang and told him that the “without prejudice” offer was no longer open. Mr Shang said to Mr Frommer that he would see him in the Tribunal “next week.”

31. The Secretary relies primarily upon the applicant’s last minute withdrawal of the applications in support of the Secretary’s application for costs.

32. I am not inclined to award costs in respect of the directions hearing of 25 May 2017 for which the applicant was inadequately prepared. Whilst the applicant’s stated need to consult with a community legal representative caused the Secretary to incur costs, some leeway needs to be given to self-represented applicants in the Tribunal, and to corporate applicants represented by officers who are not legally trained. It is not uncommon for a self-represented applicant or a director without legal training not to understand the purpose of directions, and to be inadequately prepared. The Secretary did not seek costs at the time and, had the matter gone to hearing, it is unlikely that the Secretary would have sought the costs of the directions hearing of 25 May 2017.

33. I do, however, consider that special circumstances exist warranting an award of costs in respect of the applicant’s subsequent conduct. Special circumstances are circumstances which are “out of the ordinary”; they do not need to be extraordinary or exceptional: CPD Holdings v Baguley [2016] NSWCATAP 160 at [6].

34. The withdrawal of the applications the evening before the hearing, in circumstances where Mr Shang had represented the previous week that he would proceed with the applications, is a matter which the Tribunal considers to be relevant to the existence of special circumstances, within s 60(3)(g) of the NCAT Act. The applicant’s failure to file any evidence or submissions is also a matter which is relevant within s 60(3)(f). The applicant failed to comply with the Tribunal’s directions and to participate in preparing the matters for hearing, having initiated both applications. This was in circumstances where the applicant knew that the respondent was spending time and incurring costs in preparation. This is a failure to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal, within s 36(3) of the NCAT Act.

35. The Secretary prepared lengthy statements and detailed written submissions, in accordance with the Tribunal’s orders. The applicant did not provide any explanation for its failure to file submissions or evidence in the substantive application. It did not respond to the costs application at all.

36. I also have regard to s 60(3)(g), the relative strength of the claims made by each party. The Secretary had a very strong case that the correct and preferable decision was to cancel the applicant’s provider approval. The applicant’s claims to the contrary were not supported by any evidence or submissions.

37. A matter which gives me some hesitation is that the Secretary prepared evidence and submissions, knowing that the applicant had failed to comply with the order to file its evidence by 30 June 2017. The Secretary could, instead, have applied for summary dismissal of the matter, on the basis that the applicant was not prosecuting its case (NCAT Act, s 55(1)(d)), or could have applied to have the matter relisted for directions. It is unclear why the Secretary did not make any application in respect of the applicant’s non-compliance with the timetable, which may have saved the Secretary costs.

38. Notwithstanding this, the applicant’s continued representations, through its director, that it intended to proceed with the hearing, less than a week prior to its planned commencement, constitutes special circumstances. The Secretary’s legal representatives could not reasonably have concluded that Mr Shang, on behalf of the applicant, had abandoned the application.

39. I agree with the Secretary’s submissions that Mr Shang’s explanation for the applicant’s withdrawal of its applications, being that the Secretary had confirmed that future applications would be determined according to law, in good faith and without bias or prejudgment, makes no sense. That “confirmation” was provided to the applicant a month before the applicant withdrew its applications, in a “without prejudice” letter, and the offer made in the letter had subsequently been withdrawn. Further, the Secretary was required by law to act in the way set out in the letter.

40. I am satisfied, for the reasons given above, that special circumstances exist and that there are good reasons to exercise my discretion to award the Secretary costs. The next question is the nature of the costs award.

41. A substantial amount of evidence was prepared by the Secretary in support of its interim order. This is the evidence filed prior to 2 May 2017. I do not consider that it would be fair to order the applicant to pay the costs of preparing this material, in circumstances where the Secretary was unsuccessful in the interim order application. Nor do the special circumstances of this case warrant an award of costs relating to the preparation of the material filed on 1 June 2017 (in the nature of s 58 documents).

42. As indicated above, the Secretary seeks an award of costs referable to the preparation of the matter for final hearing. The special circumstances of this case warrant an award of costs incurred from the day after the directions hearing of 8 June 2017 to the first day of the hearing, referable to the preparation of the matter for final hearing. This reflects the relative strengths of the claims made by each of the parties, the applicant’s conduct in failing to comply with the Tribunal’s directions and abandoning the applications the evening before the day of the hearing, whilst also acknowledging that, up to the directions hearing of 8 June 2017, the applicant’s conduct did not give rise to special circumstances warranting an award of costs.

Orders

43. The applicant is to pay the respondent’s costs, from 9 June 2017 to 9 August 2017, which are referable to the preparation of the matter for final hearing, such costs, if not agreed, to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014).

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 21 November 2017