Kyriacou v Chief Commissioner of State Revenue

[2009] NSWADT 175

CITATION:	Kyriacou v Chief Commissioner of State Revenue [2009] NSWADT 175
DIVISION:	Revenue Division
PARTIES:	APPLICANTS Apostolos Paul Kyriacou and Michael Peters Kyriacou RESPONDENT Chief Commissioner of State Revenue
FILE NUMBER:	076147 and 086109
HEARING DATES:	28 April 2009
SUBMISSIONS CLOSED:	24 June 2009
DATE OF DECISION:	8 July 2009
BEFORE:	Handley R - Deputy President
CATCHWORDS:	Costs
LEGISLATION CITED:	Land Tax Management Act 1956 Taxation Administration Act 1996 Administrative Decisions Tribunal Act 1997 Vexatious Proceedings Act 2008
CASES CITED:	Salon Today Pty Ltd v MMIR Pty Ltd [2009] NSWADT 71 BE v University of Technology, Sydney (GD) [2009] NSWADTAP 22 Jenkins v YMCA of Great Lakes [2008] NSWADT 335 Tu v University of Sydney (No 2) (EOD) [2002] NSWADTAP 25 Falconbridge Pty Ltd v Yarra City Council (costs) (Red Dot) [2005] VCAT 2449 Briginshaw v Briginshaw (1938) 60 CLR 336 Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 Commissioner of Police, NSW Police v LZ (GD) [2008] NSWADTAP 22 Attorney-General (Vic) v Wentworth (1988) 14 NSWLR 481 Re Williams and Australian Electoral Commission (1995) 21 AAR 467
REPRESENTATION:	APPLICANTS D Price, counsel RESPONDENT I Mescher, counsel
ORDERS:	(1)The Applicants are to pay the Respondent’s costs incurred in respect of or incidental to (1) the Applicants’ applications for summonses on 14 and 15 April 2009, (2) the Respondent’s preparation for the hearing after the filing of their further evidence and final submissions on 20 March 2009, (3) the Respondent’s further preparation for the hearing on being notified of the Applicants’ withdrawal of their applications on 24 April 2009, and (4) attendance at the hearing on 28 April 2009, such costs to be as agreed or assessed in accordance with the Legal Profession Act 2004.

1 Apostolos Paul Kyriacou and Michael Peters Kyriacou (‘the Applicants’) applied to the Tribunal for a review of two decisions made by the Chief Commissioner of State Revenue (‘the Respondent’) to assess the Applicants for Land Tax in respect of two properties owned by the Applicants, and to reject their claim for principal place of residence (‘PPR’) exemptions for the properties. When the Applicants subsequently withdrew their applications, the Respondent applied for costs.

Background

2 The Applicants jointly purchased a property at Kingsford on 27 July 1992 and at Brighton Le Sands on 22 July 1999. On 9 October 2006, searches conducted by the Office of State Revenue (‘the OSR’) revealed that the Applicants jointly owned the properties. On that day, a Land Tax Questionnaire was sent to the Applicants and, when no reply was received, on 3 November 2006, a reminder was sent. Both letters were sent to the Brighton Le Sands property. Neither letter was returned. On 8 December 2006, the OSR sent a Land Tax notice of assessment for both properties for the 2002 to 2006 Land Tax years totaling $64,026.15 to the Brighton Le Sands property. On 18 December 2006, the letter was returned unclaimed and the OSR sent the notice to an address in Botany Street, Kingsford, where the Electoral Roll and White Pages showed the Applicants as residing.

3 On 8 January 2007, Paul Kyriacou sent a fax to the OSR apologising for the delay in completing the Land Tax Questionnaire and saying he would return this by the end of the week. On 12 January 2007, he faxed a completed Questionnaire to the OSR claiming a PPR exemption in respect of both properties, stating that the Brighton Le Sands property was his PPR and the Kingsford property was Michael Kyriacou’s PPR. By letter dated 17 January 2007, the OSR asked the Applicants for energy bills for the properties for “the period from 1 January 2002 to the present”. By fax dated 31 January 2007, Paul Kyriacou asked for clarification of the request. He sent a reminder by fax on 7 February 2007.

4 On 9 February 2007, the OSR wrote to the Applicants at the Botany Street, Kingsford address explaining the request and attaching a Land Tax notice of assessment for the properties totalling $64,440.97 (further interest having accrued). On 15 and 23 February 2009, Paul Kyriacou set further faxes to the OSR requesting a reply to his fax of 31 January 2007. On 28 February 2007, the OSR wrote to the Applicants at the Brighton Le Sands property repeating that the claims for exemption for the properties had been disallowed and informing them of their right to lodge an objection. On 2 and 8 March 2007, Paul Kyriacou sent further faxes to the OSR requesting a response to his fax of 31 January 2007. The fax of 8 March 2007, accuses the OSR of ignoring him, of incompetence, of not being “truthful in the discharge of your duties and that you have been lacking in good faith”.

5 On 13 March 2007, the OSR sent a further Land Tax notice of assessment for the properties to an address in Houston Road, Kingsford. On 23 March 2007, Paul Kyriacou lodged an objection to the assessment for the 2002 to 2006 Land Tax years enclosing a letter, a copy of the completed Land Tax Questionnaire, a water bill in respect of the period 1 October 2006 to 31 December 2006, an AGL gas bill for the period ending 23 March 2006, an electricity bill for the period 11 January 2006 to 7 April 2006, and a Telstra bill issued on 17 December 2005. (The Respondent notes that none of these bills relate to the period in dispute.)

6 On 22 May 2007, the OSR review branch initiated enquiries about the properties including a search with the Rental Bond Board, the results of which indicated that the properties had been rented at various times. On that date, the OSR requested copies of electricity accounts, telephone accounts, contents insurance statements, bank statements and other documents from Paul Kyriacou in respect of the period 2002 to 2006 to substantiate his claim. On 25 June 2007, Mr Kyriacou provided further copies of the bills he had sent to the OSR with his letter dated 23 March 2007.

7 On 18 October 2007, an OSR review officer notified Mr Kyriacou that, based on the information he had provided, the OSR accepted that the Brighton Le Sands property was his PPR for the 2006 Land Tax year but said that a PPR exemption would not be allowed for the 2002 to 2005 Land Tax years because of information that the property was leased during these years. By fax dated 27 November 2007, Mr Kyriacou asked the review officer to reconsider her assessment. On 4 December 2007, Paul Kyriacou applied to the Tribunal for a review of this decision. This application is file no 076147.

8 On 14 November 2007, Michael Kyriacou requested that any correspondence relating to an assessment of Land Tax should be sent to him at the Bruce Street, Kingsford property. On 17 May 2008, Mr Kyriacou wrote to the OSR objecting to the Land Tax assessment for the two properties. On 17 June 2008, he supplied a copy of a notice from the Debt Recovery Office with a due date of 13 August 2007, and Westpac visa statements with due dates of 11 September 2006 and 12 July 2007, all addressed to him at the Bruce Street, Kingsford property. (The Respondent notes that none of these documents relate to the period in dispute.) Attached to a fax dated 25 August 2008, Mr Kyriacou attached copies of bills for the Bruce Street, Kingsford property from Energy Australia for the periods 29 December 2003 to 13 April 2004, 14 April 2004 to 12 July 2004, 12 October 2004 to 12 January 2005, and from 2 February 2006 to 5 April 2006, together with a letter from his accountant dated 22 August 2008 confirming that Mr Kyriacou’s place of residence is the Bruce Street, Kingsford property.

9 On 9 September 2008, an OSR review officer responded to Michael Kyriacou’s objection, notifying the Applicants that the decision not to grant a PPR exemption for the 2002 to 2006 Land Tax years in respect of the Bruce Street, Kingsford property had been affirmed. Enquiries about the properties made by the OSR with the Rental Bond Board indicated that the Kingsford property had been rented at various times during these years. On 10 October 2008, Michael Kyriacou applied to the Tribunal for a review of this decision. This application is file no 086109.

10 The two applications to the Tribunal have been the subject of Directions Hearings on a number of occasions. I note that on 19 November 2008, the Applicants were directed to file and serve relevant submissions and evidence by 26 November 2008. They did so on 1 December 2008. Attached to the submissions for file no 076147 (the Brighton Le Sands property) are an Energy Australia letter dated 19 December 2007 stating that Paul Kyriacou’s account for the Brighton Le Sands property has been active since 1 January 2001, a Sydney Water Financial Transaction Statement for the property showing the amounts payable for the property between 18 August 1998 and 18 September 2006, a copy of the White Pages (undated) showing Paul Kyriacou’s listing against the address of the Brighton Le Sands property, a further copy of the bills for the property supplied by Mr Kyriacou with his objection on 23 March 2007, and a letter from Victoria Bruce dated 24 November 2008 confirming she had resided at the property as a boarder from 16 September 2001 to 21 March 2002, and from Gae Sorenson (signature undecipherable) dated 29 September 2004 referring to her having shared Mr Kyriacou’s house with him for the previous two years.

11 Attached to the submissions for file no 086109 (the Kingsgrove property) are letters from Westpac and others addressed to Michael Kyriacou at the property in 2006 and 2007 (which do not appear to relate to the relevant period in issue), Westpac loan account statements for 2003, 2004 and 2005 addressed to Mr Kyriacou at the property, AGL gas bills issued on 21 November 2003 and 29 January 2004, an Energy Australia bill issued to Mr Kyriacou for the property on 30 December 2003, a letter from Daniel Ling dated 22 November 2008 confirming that he resided at the property as a boarder from October 2004 to April 2006, and a letter from Mario Santoro dated 17 November 2008 and John Ischak, undated, referring to their having visited Mr Kyriacou at the property in 2003, 2005 and 2006.

12 On 19 January 2009, the Respondent filed his written submissions in both matters. On 6 February 2009, the Applicants filed their responses to these submissions. On 20 March 2009, the Respondent filed their evidence and further written submissions. The evidence included documents produced by the Rental Bond Board in respect of the properties evidencing rental bonds paid and refunded during the relevant years, and statements from seven persons who claimed to have leased one or other of the properties during the relevant years.

13 Various summonses having previously been issued at the request of the parties, on 14 and 15 April 2009, at the request of the Applicants, the Registrar of the Tribunal issued summonses to the Respondent, the NSW Treasurer and the Department of the Premier and Cabinet. The Respondent objected that the summonses were defective and the matter was stood over to the hearing scheduled for 27 April 2009. On 20 April 2009, the Applicants filed further submissions in reply.

14 At 10.28 am on Friday 24 April 2009, the Tribunal received a fax from the Applicants withdrawing their applications in both matters before the Tribunal. The Respondent requested that the hearing scheduled to commence at 10.00 am on Monday 27 April 2009, and listed for three days not be vacated so that the Respondent could make an application for costs. The Tribunal listed the matters for a costs hearing on Tuesday 28 April 2009.

15 At the hearing, I dismissed the two applications before the Tribunal and heard oral submissions from the parties on the Respondent’s application for costs. It became apparent during the hearing that counsel for the Applicants, Mr Price, would not be in a position to adequately respond to the Respondent’s submissions, his having only been briefed in the matter on the previous day and having not had a proper opportunity to examine the documentation or obtain full instructions from the Applicants. I therefore agreed to adjourn the matter pending the filing of further written submissions from the parties and with their agreement that on receipt of those submissions I would make a decision ‘on the papers’.

The Relevant Legislation

16 As a result of an amendment to the Administrative Decisions Tribunal Act 1997 (‘the ADT Act’), the former section 88 was repealed and replaced by the following new section 88. This amendment took effect on 1 January 2009 and, pursuant to section 44(2) of the Administrative Decisions Tribunal Amendment Act 2008, the new section 88 applies “to applications and proceedings that were made or commenced, but not finally determined, before the commencement of the substantive amendment concerned”.

88 Costs

(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 Respondent’s Submissions

17 Mr Mescher contended that the Applicants should pay the Respondent’s costs in these proceedings. He referred to the recent decisions of the Tribunal in Salon Today Pty Ltd v MMIR Pty Ltd [2009] NSWADT 71 (‘Salon Today’) and BE v University of Technology, Sydney (GD) [2009] NSWADTAP 22 (‘BE’), where the new section 88 of the ADT Act was applied. In the present case, the Respondent is relying on a number of the factors to which the Tribunal should have regard pursuant to section 88(1A). Mr Mescher submitted that it is not necessary for the Tribunal to make findings in relation to factual matters. Rather, section 88(1A) requires the Tribunal to be satisfied that it is fair to make a costs order having had regard to the matters referred to in paragraphs (a) to (e). To do this, the Tribunal can draw inferences from the relevant documents and the course of the proceedings.

18 First, Mr Mescher noted that pursuant to section 100(3) of the Taxation Administration Act 1996, an applicant for review bears the onus of proving his or her case in the Tribunal. Second, with regard to the facts, he noted that the Applicants jointly own both properties that are the subject of these proceedings. The Applicants contend that, during the relevant years, Paul Kyriacou occupied the Brighton Le Sands property as his PPR, while Michael Kyriacou occupied the Kingsgrove property as his PPR.

19 In terms of section 88(1A), Mr Mescher submitted first, that the Applicants conducted the proceedings in a way that unnecessarily disadvantaged the Respondent by conduct such as (a) vexatiously conducting the proceedings (section 88(1A)(a)(vi)), and (b) attempting to deceive the Respondent (section 88(1A)(a)(v)). Secondly, the Applicants were responsible for prolonging unreasonably the time taken to complete the proceedings (section 88(1A)(c)), and thirdly, the Applicants’ claim had no tenable basis in fact (section 88(1A)(c)).

20 In support of these grounds, Mr Mescher referred the Tribunal to the correspondence between the Applicants and Respondent between December 2006 and 4 December 2007, when the first application for review was filed with the Tribunal, the lack of any corroborative evidence supporting the Applicants’ claim for the PPR, the issue of belated summonses only a few days before the hearing which lacked any legitimate forensic purpose, the late withdrawal of the applications for review on the day before the hearing after the Respondent had completed a lengthy and detailed preparation for the hearing, and the length and nature of the written submissions previously filed by the Applicants.

21 Mr Mescher submitted that the Applicants attempted to deceive the Respondent on the issue of their PPRs (s 88(1A)(v)). He withdrew any earlier submission to the effect that the Applicants sought to deceive the Tribunal. In their correspondence with the OSR, the Applicants provided no objective evidence to support their PPR contentions, notwithstanding repeated requests and the evidence produced by the OSR, for example the electoral roll, which indicated that their PPRs were elsewhere. Mr Mescher noted that the Applicants never indicated, for example, that they did not have the energy bills for the relevant period. They could have said they did not have these documents and would produce other documents in lieu. The fact that they did not have legal representation is irrelevant. The request for documents was clear and unequivocal and needed no legal advice or input. The Respondent was simply trying to obtain corroborative evidence showing the Applicants’ PPRs during the relevant period. Energy Australia’s letter of 19 December 2007 says nothing about electricity ‘usage’ during the relevant period – merely that the account was ‘active’. Thus, it does not amount to corroborative evidence of the Applicants’ PPRs.

22 Mr Mescher contended that the documents provided by the Applicants to the OSR in the course of the Tribunal proceedings are largely irrelevant to the Land Tax years in issue or fail to provide evidence of occupation. For example, the payment of water bills does not evidence occupation. Where a property is tenanted, the landlord usually pays such bills.

23 Mr Mescher submitted that the Applicants’ conduct in these proceedings, for example, their continuing procrastination in order to avoid producing the relevant objective evidence requested by the OSR, delaying tactics, the lack of any tenable basis for their contentions, for example as to the powers of the Respondent to request documents, and belated applications for the issue of summonses and their frivolous nature, support a finding that the proceedings were vexatious (section 88(1A)(a)(vi)) and had the effect of unreasonably prolonging the proceedings (section 88(1A)(b)). It is also open to the Tribunal to make a finding that the Applicants’ case had no tenable basis in fact (section 88(1A)(c)) by reason of the lack of any corroborative evidence showing the properties as the Applicants’ PPRs during the relevant period. Mr Mescher said that at the date of his written submissions in reply, there had been no independent corroborative evidence from, for example, statutory authorities as to the Applicants’ usage of the properties during the relevant period.

24 Mr Mescher said the most recent applications for the issue of summonses made by the Applicants - for example, those addressed to the Respondent, to the NSW Treasurer and the Department of the Premier and Cabinet - served no legitimate forensic purpose, and the material sought was irrelevant to these proceedings. Such applications required attendances for the Respondent, wasted time and incurred costs. Then, after a considerable time spent in pursuing these proceedings, the Applicants withdrew their applications at approximately 11.00 am on the business day before the hearing was scheduled to commence. Given the course of these proceedings, one would have expected that if the Applicants were intending to withdraw, they would have done so much earlier in the proceedings. If they had done so, the Respondent would not have incurred further costs in preparation for the hearing. Mr Mescher said evidence of the Applicants’ motive can be inferred from the course of events.

25 Mr Mescher referred to the evidence provided by the Respondent in these proceedings – for example, Rental Bond Board records, and statements from those who say they tenanted the properties - which, he contended, supports a finding that the properties were not the Applicants’ PPRs. By contrast, the Applicants had not even themselves filed sworn statements attesting to their occupation of the properties during the relevant period.

26 Mr Mescher denied the Respondent had changed his case part way through the proceedings, noting that the Applicants had not particularised the basis for this allegation. He submitted that the Tribunal should be ‘comfortably satisfied’ that the Respondent has made out his case for an award of costs in his favour and that this is an appropriate case to make such an award. In all the circumstances, it would be unfair for the Respondent to have to bear his own costs.

The Applicants’ Submissions

27 Mr Price noted that the Respondent is expected to be a model litigant in such proceedings. In this instance, Mr Mescher appears to have prejudged the outcome. As the hearing will not now proceed, the Tribunal is not in a position to make findings in relation to the application: Jenkins v YMCA of Great Lakes [2008] NSWADT 335, at [21]. The Applicants are likely to be prejudiced by an assumption that the Respondent would have succeeded. Moreover, even if the Tribunal were to find that the Applicants’ contentions lacked substance, that alone would be unlikely to justify the making of a costs order: Tu v University of Sydney (No 2) (EOD) [2002] NSWADTAP 25, at [43].

28 Mr Price said in circumstances where the hearing is not going to be held, it is not necessary to go into enormous detail on factual matters.

29 Mr Price said that pursuant to section 88(1) of the ADT Act, the usual position is that each party is to bear its own costs in the proceedings. An award of costs is an exception to the rule and costs may only be awarded if the Tribunal is satisfied that it is fair to do so. It is a matter for the Respondent to prove such elements as are required by section 88(1A).

30 Mr Price said the Applicants’ conduct relied on by the Respondent in supporting his submissions, occurred before the proceedings commenced. It does not follow from the fact that the Applicants did not provide the documents sought by the Respondent that the Applicants were attempting to mislead the Respondent. An alternative explanation is that the Applicants did not have the documents requested. While it is accepted that the Applicants could have informed the Respondent of this, it should be noted that they did not have independent legal advisers at the time. Moreover, there was no unreasonable delay by the Applicants. Rather, what occurred was that the Respondent was sending correspondence to an incorrect address, and Paul Kyriacou was asking about the Respondent’s power to request the documents sought. The sequence of Mr Kyriacou’s faxes to the Respondent in early 2007 was an attempt to get a response from the Respondent, and a reflection of his increasing frustration in not receiving a response. It was not the conduct of a party procrastinating.

31 Mr Price noted that there is no definition of ‘vexatious’ in the ADT Act. He referred to the definition of ‘vexatious proceedings’ in the Vexatious Proceedings Act 2008 (NSW) and to the discussion of ‘vexatious’ by the Victorian Civil and Administrative Tribunal (‘VCAT’) in Falconbridge Pty Ltd v Yarra City Council (costs) (Red Dot) [2005] VCAT 2449 (‘Falconbridge’). In that decision, at [11], the Tribunal said to establish that proceedings are vexatious, it is necessary to produce evidence of motive, other than simply the fact that the parties are in dispute and a party has taken advantage of proceedings open to the party under relevant legislation. Mr Price said there is no evidence of the Applicants’ motive in these proceedings and the Respondent’s application for costs is manifestly groundless. The mere issue of summonses seeking irrelevant documents does not establish vexatiousness. This is a regular occurrence in every jurisdiction.

32 With regard to the Respondent’s claim that the Applicants unreasonably prolonged the proceedings by failing to produce documents, Mr Price contended, first, that the proceedings had not commenced at the time. Secondly, a plausible explanation has been provided for the Applicants’ conduct. Thirdly, to the extent that the proceedings were prolonged, this was due to the Respondent changing the basis upon which it denied the Applicants were entitled to the PPR exemption and, at a relatively late stage, seeking an adjournment for the purpose of issuing summonses in respect of evidence available to it prior to the commencement of proceedings.

33 Mr Price sais the Respondent’s claim that the Applicants’ cases were untenable in fact is based primarily on the Applicants’ failure to produce the electricity statements requested by the Respondent. The absence or presence of these accounts would not have been determinative of these proceedings. Rather, the Tribunal’s task would have been to assess the entirety of the evidence presented. As there has not been a hearing on the substantive issues, the Tribunal cannot adjudicate on the contested questions of fact. Here there was evidence supporting the Applicants’ claims. As the Tribunal cannot determine which evidence would have been accepted, it cannot make a finding that the claims were lacking in substance or misconceived. Similarly, the Tribunal cannot find that the Applicants’ claims were untenable in fact.

34 Mr Price submitted that the decisions in Salon Today, which concerned the terms of a ‘Calderbank’ letter, and in BE, which concerned the costs consequences of appealing out of time, are of minimal assistance in the present case.

35 Mr Price said that given the Respondent’s status as a model litigant and the seriousness of the allegations, the Tribunal should approach determination of the costs application on the basis of whether it is comfortably satisfied that the Respondent has established the necessary factors: Briginshaw v Briginshaw (1938) 60 CLR 336 (‘Briginshaw’). Here, the Respondent’s submissions amount to no more than an assertion and invite the Tribunal to speculate on what might have occurred during a substantive hearing. In the circumstances, the proper determination is to dismiss the Respondent’s application for costs.

Discussion

36 Because the new section 88 has only recently taken effect, the relevant case law is limited. In Salon Today, at [72], Judicial Member Molloy said that in introducing the new section, Parliament recognised “that there is a need for this Tribunal to be more flexible and widen the scope of the litigant’s entitlement to costs”. As a result, Parliament has introduced “a different test, a test of fairness, having regard to a number of parameters/factors”. He noted that section 88(1A)(a) sets out various aspects of litigation that would generally have been considered in relation to whether there are ‘special circumstances’, pursuant to the former section 88(1); similarly with section 88(1A)(b). However, he commented that section 88(1A)(c) appears to be a new concept that considerably widens the factors the Tribunal can take into account in considering whether it is fair to award costs; similarly with section 88(1A)(d). Finally, section 88(1A)(e) gives the Tribunal a broad power to have regard to other matters it considers relevant.

37 In BE, the President of the Tribunal, O’Connor DCJ, in making an award of costs, commented that the timeliness of making complaints and their dispatch and the filing of appeals is important. He had regard to the appeal being filed “well out of time”, and to its bordering “on the vexatious”, in making an award of costs in connection with the appeal.

38 I agree that the new section 88 confers a broad discretion on the Tribunal in terms of the relevant matters it may take into account in the exercise of its power to award costs if satisfied that it is fair to do so. Nevertheless, it must be borne in mind that the primary principle stated in section 88(1) is that each party to proceedings before the Tribunal should bear that party’s own costs. An award of costs is an exception to this general principle. It therefore remains the normal expectation that the parties in Tribunal proceedings should bear their own costs. To that extent the position in proceedings before the Tribunal is different from that in adversarial proceedings before the courts where the successful party can ordinarily expect an order for costs.

39 I note that section 88(1A) gives the Tribunal a discretion to “award costs in relation to proceedings before it”. Thus, costs incurred prior to the commencement of proceedings are not included. Paul Kyriacou’s application to the Tribunal in respect of the Land Tax assessment for both properties was filed on 4 December 2007 (file no 076147). Michael Kyriacou’s application, also in respect of that same assessment, was filed on 10 October 2008 (file no 086109).

40 The Respondent’s application for costs relies on four grounds:

(1) the Respondent contends that the Applicants have conducted the proceedings in a way that unnecessarily disadvantaged the Respondent by reason of their conduct in attempting to deceive the Respondent (section 88(1A)(a)(v));

(2) the Respondent contends that the Applicants have conducted the proceedings in a way that unnecessarily disadvantaged the Respondent by reason of their conduct in vexatiously conducting the proceedings (section 88(1A)(a)(vi);

(3) the Respondent contends that the Applicants unreasonably prolonged the time taken to complete the proceedings (section 88(1A)(b)); and

(4) the Respondent contends that the Applicants’ claim had no tenable basis in fact (section 88(1A)(c)).

41 In terms of the first ground, the alleged deception, the conduct on which the Respondent relies is primarily that which occurred before Paul Kyriacou commenced the proceedings by filing his application for review on 4 December 2007. I note that between January and March 2007, there appears to have been a breakdown of communication between Mr Kyriacou and the OSR partly as a result of Mr Kyriacou’s failure to respond directly to the requests for information from the OSR, the OSR’s failure to respond specifically to Mr Kyriacou’s faxes and it sending correspondence to Mr Kyiacou at the Botany St, Kingsford address. Mr Kyriacou’s fax of 8 March 2007 indicates a high level of frustration on Mr Kyriacou’s part. At worst, Mr Kyiacou’s conduct might be considered obfuscatory. However, this conduct occurred before the proceedings commenced and I am not satisfied from the Respondent’s submissions that there is evidence of deception in relation to the Tribunal proceedings.

42 With regard to the second ground, the allegation of vexatious conduct, as the parties are aware, the term ‘vexatious’ is not defined in the ADT Act. I note the discussion of the meaning of ‘vexatious’ in, for example, Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 (see Deane J at 247: “‘vexatious’ should be understood as meaning productive of serious and unjustified trouble and harassment”), Commissioner of Police, NSW Police v LZ (GD) [2008] NSWADTAP 22, and the recently enacted Vexatious Proceedings Act 2008, where, at section 6, the following (non-exclusive) definition appears:

6 Meaning of " vexatious proceedings"

In this Act, "vexatious proceedings" includes:

(a) proceedings that are an abuse of the process of a court or tribunal, and

(b) proceedings instituted to harass or annoy, to cause delay or detriment, or for another wrongful purpose, and

(c) proceedings instituted or pursued without reasonable ground, and

(d) proceedings conducted in a way so as to harass or annoy, cause delay or detriment, or achieve another wrongful purpose. The proceedings were not "productive of serious and unjustified trouble and harassment"

43 I also note the decision in Falconbridge, where, at [11], VCAT referred to the need:

“to produce evidence of motive other than the fact that the parties are in dispute and that the applicant has taken advantage of proceedings available under relevant legislation which are open to the applicant in the circumstances.”

44 The requirement for there to be ‘intention’ has previously been recognised in Attorney-General (Vic) v Wentworth (1988) 14 NSWLR 481 at 491, and see also Re Williams and Australian Electoral Commission (1995) 21 AAR 467.

45 Adopting the meaning of ‘vexatious’ set out in section 6 of the 2008 Act, I must be satisfied from the Respondent’s submissions that there is sufficient evidence of conduct by the Applicants that falls within the definition set out above. The Respondent relies, in particular, on the Applicants’ correspondence, which predates the commencement of proceedings, the alleged frivolous nature of and the date of the summonses, the lateness of the withdrawal, the absence of corroborative evidence concerning the PPR exemptions and the length of the Applicants’ written submissions.

46 In my view, it is probable that the breakdown in communication between the parties in early 2007 soured the Applicants’ or, at least Paul Kyriacou’s attitude towards the OSR and the Respondent. Certainly, in my view, the Applicants’ late application for summonses (for the production of documents) on 14 and 15 April 2009, a short time before the hearing, the persons to whom the summonses were directed (the Respondent, the NSW Treasurer and the Department of the Premier and Cabinet), and the nature of the documents sought (Ministerial Directions or other guidance or instructions issued to the Respondent, the Respondent’s Instrument of Delegation, guidelines used in the exercise of the Respondent’s powers and a record of all instances where such powers were exercised in the period May 2006 to 14 April 2009), indicates that these applications were frivolous or, at least, had no legitimate forensic purpose. I accept the Respondent’s contention that such applications required attendances at the Tribunal by the Respondent and wasted time and incurred expense. In my view, sufficient evidence of intention on the part of the Applicants can be inferred from the course of conduct adopted in relation to the submissions and summonses.

47 With regard to the third ground on which the Respondent relies, that the Applicants unreasonably prolonged the time taken to complete the proceedings (section 88(1A)(b)), the attitude and approach adopted by the Applicants which is reflected in the tone of some of their written submissions (for example, those filed on 27 November 2008 and 20 April 2009) and in the applications for the issue of summonses referred to above, was not one conducive to these proceedings being resolved in a timely manner.

48 The fourth ground on which the Respondent relies is that the Applicants’ claim had no tenable basis in fact (section 88(1A)(c)). I note that the Applicants did not seek legal representation until very late in the proceedings. Mr Price told me at the hearing that he took oral instructions from the Applicants in relation to the costs application on the day before it was heard (transcript page 34). In my view, given the objects of the Tribunal, stated in section 3, include that of ensuring the Tribunal is accessible, it is not appropriate to make assumptions about the level of understanding of unrepresented applicants on matters of law. Nevertheless, if the Applicants did seek legal advice on whether to proceed with their applications, which is not clear, they should not have left this until the last minute. It is not unreasonable to expect an unrepresented party to at least be aware that their conduct in such proceedings has consequences in terms of how representatives of the agency who is the respondent to the application respond and present the agency’s case to the Tribunal. Obviously, such consequences have cost implications for the public purse.

49 The Tribunal may only make a costs order under section 88(1A), as an exception to the general principle that the parties should bear their own costs, if it is satisfied that it is fair to do so having regard to any of the factors set out in paragraphs (a) to (e). While I am not satisfied, as the Respondent contended, that the Applicants attempted to deceive the Respondent in relation to these proceedings, I am ‘comfortably satisfied’ (Briginshaw) that the Applicants’ conduct in these proceedings resulted in the Respondent incurring unnecessary costs both by reason of the nature of the some of the Applicants’ applications for summonses and by reason of the late withdrawal of their applications at approximately 11.00 am on the business day before the hearing was to due to commence. In such circumstances, it is in my view fair that the Applicants should bear responsibility for a portion of the Respondent’s costs.

Decision

50 I have decided that a fair outcome is to make a limited award of costs for the Respondent. The Applicants are to pay the Respondent’s costs incurred in respect of or incidental to (1) the Applicants’ applications for summonses on 14 and 15 April 2009, (2) the Respondent’s preparation for the hearing after the filing of their further evidence and final submissions on 20 March 2009, (3) the Respondent’s further preparation for the hearing on being notified of the Applicants’ withdrawal of their applications on 24 April 2009, and (4) attendance at the hearing on 28 April 2009, such costs to be as agreed or assessed in accordance with the Legal Profession Act 2004.