Newham Business Brokers Pty Ltd v ACN 120 452 744 Pty Ltd & Anor (No 2) (Civil Dispute) - [2020] ACAT 73

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

NEWHAM BUSINESS BROKERS PTY LTD v ACN 120 452 744 PTY LTD & ANOR (No 2) (Civil Dispute) [2020] ACAT 73

XD 1082/2017
Catchwords: CIVIL DISPUTE – costs under section 48 – interest on top of $25,000 monetary limit – tribunal lodgement fee as costs – cost where third party claim is an abuse of process

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 19, 48

Cases cited:Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27
Bell & De Castella & Ors [2013] ACAT 66
Carew-Neil v Bower [2016] ACAT 54
Newham Business Brokers Pty Ltd v Jodi Miller Pty Ltd as trustee for the Miller Family Trust & Anor [2018] ACAT 57
Newham Business Brokers Pty Ltd v Jodi Miller Pty Ltd as trustee for the Miller Family Trust [2019] ACAT 21
Newham Business Brokers Pty Ltd v ACN 120 452 744 Pty Ltd & Anor [2020] ACAT 18
Blackshaw & Anor v Campbell [2019] ACAT 41
Ridgeway v The Queen [1995] HCA 66
Smith v J&C Whyte [2016] ACAT 132

Tribunal:Senior Member A Anforth

Date of Orders:  17 September 2020
Date of Reasons for Decision:      17 September 2020
AUSTRALIAN CAPITAL TERRITORY
CIVIL & ADMINISTRATIVE TRIBUNAL           XD 1082/2017

BETWEEN:
NEWHAM BUSINESS BROKERS PTY LTD
Applicant

AND:
ACN 120 452 744
Respondent

AND:
SOPHIE MELISSA MALONE
Third Party

TRIBUNAL:Senior Member A Anforth

DATE:17 September 2020
ORDER

The Tribunal orders that:

The respondent is to pay the applicant the commission payable under their contract dated 8 April 2015 in the sum of $25,300 on or before 15 October 2020.
The third party’s costs application is dismissed.

………………………………..
Senior Member A Anforth

REASONS FOR DECISION

This matter is a resumption of Newham Business Brokers Pty Ltd v ACN 120 452 744 Pty Ltd [2020] ACAT 18; Newham Business Brokers Pty Ltd v Jodi Miller as trustee for the Miller Family Trust Pty Ltd [2019] ACAT 21 and Newham Business Brokers Pty Ltd v Jodi Miller Pty Ltd as trustee for the Miller Family Trust & Anor [2018] ACAT 57. The present decision adopts but does not repeat all the history, evidence and findings of fact recited in those decisions.
The decision in Newham Business Brokers Pty Ltd v Jodi Miller Pty Ltd as trustee for the Miller Family Trust & Anor [2020] ACAT 18 found that the respondent was liable to pay the applicant a commission for the sale of the respondent’s business and dismissed the respondent’s claim against the third party. The decision left for submissions:
(a)the quantification of the applicant’s claim; and
(b)the issue of the costs of the third party who was joined by the respondent.

The quantification of the applicant’s claim

The matter was resumed for submissions on this issue. The applicant remained self-represented, Mr Marques (solicitor) appeared for the respondent and Mr Christensen (solicitor) appeared for the third party. The parties reminded the Tribunal that the quantum of the applicant’s claim exceeded the $25,000 jurisdictional limit of the Tribunal and the applicant had abandoned the excess. The only remaining issue of quantification was that of interest and the Tribunal filing fee.
Section 19(1) of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) does not allow interest on top of the $25,000 maximum monetary jurisdiction. Section 48(2)(i) does permit the Tribunal lodgement fee, which in this case was $300.
In relation to the third party costs issue, the Tribunal provided a timetable for the respondent and third party to file any further written submission.

The third party’s costs

The general costs provision in ACAT is section 48 ACAT Act:
48(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—
(a) if the tribunal decides an application in favour of the applicant, the tribunal may order the other party to pay the applicant––
(i) the filing fee for the application; and
(ii) any other fee incurred by the applicant that the tribunal considers necessary for the application; or
…
(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 obstruction; or
…
(3) For subsection (2) (d), reasonable costs of the other party arising from the application include reasonable legal costs but do not include holding costs.
For present purposes the relevant provision is section 48(2)(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
On 22 July 2020 the third party filed her written submissions. The third party cited Carew – Neil v Bower [2016] ACAT 54 and Bell & De Castella & Ors [2013] ACAT 66 to the effect costs may be awarded against a party in circumstances where that party knew, or ought to have that their application was lacking in substance.
The third party’s submission rightly acknowledged that the above cases were “expressly disapproved by the Tribunal on appeal in Smith v J&C Whyte [2016] ACAT 132.”[1]
[1] Third Party application for costs, 22 July 2020, at [12]-[14]
The respondent submitted that its third party claim was arguable and hence not an abuse of process. The respondent relied upon the fact that Senior Member Robinson did not strike out the third party claim when called upon to do so earlier in the proceedings. The respondent relied on the unreported decision of Senior Member Robinson in another matter, namely Coombs v ACN 120452744 (XD 343/2017) which was said to have:
set a precedent for the Respondent’s argument as to the effectiveness of clause 8.1 of the SOBA and submits that this order provides the claim against the Third Party with substances and reasonable prospects of success.[2]
[2] Respondent reply to third party application for costs, 31 July 2020 at [5.2]
The presently constituted Tribunal has been unable to locate this decision and no copy was provided by the respondent. If the decision in Coombs were of the significance now attributed to it, it is curious that it was not raised by the respondent in any of the previous hearings, including before Senior Member Robinson in Newham Business Brokers Pty Ltd v Jodi Miller Pty Ltd as trustee for the Miller Family Trust & Anor [2018] ACAT 57.

Consideration of the costs issue

In Smith v J&C Whyte [2016] ACAT 132 (Smith) Presidential Member McCarthy said:
With respect, I do not agree with the views of the tribunal in Bell v De Castella and Rob De Castella’s Smartstart For Kids Ltd or in Carew-Neill v Bower, that delay or obstruction encompasses bringing an unmeritorious action, or where bringing an action amounted to bad faith or abuse of process. Conduct of that kind is dealt with separately in section 32 of the ACAT Act, and costs are not payable for such conduct except in the case of applications for review of a decision under one of the Acts stated in section 48(2)(d).
In Blackshaw & Anor v Campbell [2019] ACAT 41 (Blackshaw) Presidential Member McCarthy addressed the legislative hiatus that the construction in Smith raised:
49.Nevertheless, I have sympathy with the applicants’ position. This application should never have been made. It is devoid of any merit at all. I am satisfied that it was made solely for an improper purpose, namely to delay implementation of the orders I made on 16 September 2016 and in that way (where all appeal processes have been exhausted) to frustrate the administration of justice. I will dismiss it under section 32(1)(c) of the ACAT Act as an abuse of process.
50.At present, under section 48(2)(d) of the ACAT Act, the Tribunal’s power to order costs where an application is dismissed or struck out under section 32 of the ACAT Act is available only in relation to applications for review of a decision under the Heritage Act 2004, the Planning and Development Act 2007 or the Tree Protection Act 2005.
51.In my view, this case illustrates why the legislature should consider amending section 48 to permit costs to be awarded against an unsuccessful party where an application or part of an application of any kind is dismissed or struck out under section 32(2) of the ACAT Act.
With no disrespect intended to Presidential Member McCarthy, the presently constituted Tribunal is not persuaded by the logic in Smith and in Blackshaw. The distinction between bringing a meritless case ‘made solely for an improper purpose’ and engaging in delaying conduct that has the same effect on the other party, is too fine a distinction for the present Tribunal. At its bottom line, the present Tribunal is of the view that a claim (or defence) that constitutes an abuse of process at law (however described), is just an extreme form of the delaying conduct referred to explicitly in section 48(2) and should be the subject of costs orders.
It may be difficult in some cases to categorise conduct and whether it amounts to an abuse of process. In making this judgement the Tribunal would need to take account of the intended role of the Tribunal in resolving disputes between unrepresented litigants and may be slow (but not precluded) from finding abuse of process (in any of its forms) in the unrepresented context.[3]
[3] Johnston v Ainslie Football Club Ltd(No.2) [2018] ACAT 130
The present case is not of that kind. The respondent was legally represented at all material times and made a considered and conscious decision to proceed with the third party claim. The merits of the third party claim was explicitly raised with the respondent earlier in the proceedings and doubts expressed by Senior Member Robinson, concerning its merits. The third party herself, through her solicitors raised the matter with the respondent via a Calderbank letter of 11 July 2018 in which it described the third party claim as “…hopeless and should never have been brought…” and foreshadowed the present costs application.
An ‘abuse of process’ as used above is a broad term that includes a range of disapproved conduct by a party. It has long been held in the context of judicial and administrative proceedings that the categories of abuse of process are not closed and that courts and tribunal have an inherent power to protect their processes against abuse.[4] Gaudron J explained in Ridgeway v The Queen [1995] HCA 66 at [32] (in a passage quoted with approval in Batistatos at [14]):
Abuse of process cannot be restricted to ‘defined and closed categories’ because notions of justice and injustice, as well as other considerations that bear on public confidence in the administration of justice, must reflect contemporary values and, as well, take account of the circumstances of the case.
[4] Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27
The power of courts and tribunals to summarily dismiss applications or defences as an ‘abuse of process’ is one power open to it. Section 32 of the ACAT Act recognises and embodies this principle. This response may be adequate in terms of preserving or protecting the Tribunal’s resources and public confidence, but it may not do much to remedy the injustice to the innocent party. Hence why, in courts and tribunal where the general discretion to award costs applies, a finding of ‘abuse of process’ by one party would be more than sufficient grounds to award costs against that party.
The summary strikeout power in section 32 is not a substitute for the costs power in section 48. It may be that on the state of the evidence and understanding of the issues at an early point of the proceedings, a strike out motion may fail. This does not mean that when the hearing is complete and all relevant findings made, that the abusive nature of a claim or defence may not be unmasked. If the power in section 32 were seen to be an alternative to that in section 48, then the innocent party may be put to the unreasonable cost of making repetitive strikeout applications as the case unfolded and its abusive nature is progressively disclosed. This would be impractical, and the innocent party should be allowed to see the hearing to finality and then make its costs application based on the finally disclosed abusive nature of the process in question.
The problem in the present case arises because section 48(2) does not explicitly provide that an ‘abuse of process’ is a ground for awarding costs. This is also true of most costs provisions in other legislation. But section 48(2) does nominate ‘unreasonable delay or obstruction’ as the ground for awarding costs, and in Smith, Presidential Member McCarthy took the view that:
(a)bringing a meritless claim (or defence) does not fall with the description of “unreasonable delay or obstruction”; and
(b)implicitly, that the use of these terms in section 32 raises the expressio unius exclusio alterius[5] presumption against an abuse or process falling within section 48(2).
[5] A principle in statutory construction: when one or more things of a class are expressly mentioned others of the same class are excluded
This construction of section 48(2) is plainly one that is available on the text, but it is not the only one. It is possible and reasonable to read the words of section 48(2)(b): “caused unreasonable delay or obstruction before or while the tribunal was dealing with the application”: as describing a milder form of abuse of process. If section 48(2) is read this way then the issue becomes whether the Legislature intended to single out a milder form of abuse for sanction, but not to sanction a more grievous form of abuse. This would be a strange intent to attribute to the Legislature.
The presently constituted Tribunal found the third party claim to be meritless, “coloured with unconscionability…and collateral purpose”. If the costs issue were being considered by the present Tribunal unconstrained by Smith, the respondent would be ordered to pay the third party’s costs of $4,114.00. However, the present Tribunal must apply the decision in Smith determined at the Presidential level and leave the debate over the construction of section 48(2) to a future appeal tribunal, superior courts or Legislature.
For this reason, the present Tribunal reluctantly dismisses the costs order but joins with Presidential Member McCarthy’s call for statutory review of the provision.
………………………………..
Senior Member A Anforth

HEARING DETAILS

FILE NUMBER:	XD 1082/2017
PARTIES, APPLICANT:	Newham Business Brokers Pty Ltd
PARTIES, RESPONDENT:	ACN 120 452 744
PARTIES, THIRD PARTY	Sophie Melissa Malone
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	Eastwoods Legal
SOLICITORS FOR THRID PARTY	Mr P Christensen
TRIBUNAL MEMBERS:	Senior Member A Anforth
DATES OF HEARING:	14 July 2020