Salim Mehajer v Chief Executive of the Office of Local Government [No 2]

[2015] NSWSC 403

Supreme Court

New South Wales

Medium Neutral Citation:	Salim Mehajer v Chief Executive of the Office of Local Government [No 2] [2015] NSWSC 403
Hearing dates:	1 October 2014; 19 December 2014
Date of orders:	10 April 2015
Decision date:	10 April 2015
Jurisdiction:	Common Law
Before:	Adams J
Decision:	The defendant is to pay the costs of the plaintiff of and incidental to the appeal, assessed on the ordinary basis.
Catchwords:	Practice and procedure – costs – appeal against costs order – costs follow the event
Legislation Cited:	Civil and Administrative Tribunal Act 2013 Crimes (Appeal and Review) Act 2001 Family Provision Act 1982 Local Government Act 1993
Cases Cited:	Commonwealth v Gretton [2008] NSWCA 117 McCusker v Rutter [2010] NSWCA 318 Mehajer v Chief Executive of the Office of Local Government [2014] NSWSC 1804
Category:	Costs
Parties:	Salim Mehajer (Plaintiff) Chief Executive of the Office of the Local Government (Defendant)
Representation:	Counsel: J Kay Hoyle (Plaintiff) A M Mitchelmore/B Mostafa (Defendant) Solicitors: KM Legal Pty Ltd (Plaintiff) Office of Local Government (Defendant)
File Number(s):	2014/189468
Publication restriction:	None

Judgment

Introduction

1. On 19 December 2014 the Court set aside orders made by the Civil and Administrative Tribunal in respect of the plaintiff, substituted other orders and directed the parties to make written submissions on the question of costs: Mehajer v Chief Executive of the Office of Local Government [2014] NSWSC 1804. The plaintiff submits that the usual order following success of a party that the other party pay the successful parties’ costs as provided by part 42 of the Uniform Civil Procedure Rules should be made. The defendant, on the other hand, submits that the Court has a wide discretion in determining whether or not to order costs and submits that no order for costs should be made.

Discussion

2. The principal argument relied on by the defendant was that, although the plaintiff succeeded in obtaining leave to appeal, he was not successful in obtaining a significant reduction to the penalty imposed by the Tribunal. The defendant contends that, although the suspension imposed by the Tribunal was quashed the plaintiff was nevertheless reprimanded and, effectively, by depriving him of the remuneration due to him for a period, imposed a monetary penalty. The defendant points to the Court’s view that the effect of a suspension was not only to punish the plaintiff but also his constituents. As I understand the argument, that the plaintiff was committed to continue to represent his constituents was not a benefit to him but to them and, accordingly, the effect of the substituted orders was, so far as he was concerned, not to reduce the penalty.

3. The plaintiff, in effect, submits that the defendant overcomplicates both the nature of the appeal and its outcome. He submits that he was successful in the proceedings since the decision of the Tribunal was set aside as he sought, having erred in law in failing to take account of the difference between penalties that prevented the plaintiff from undertaking his duties as a counsellor (whether by suspension or otherwise) and those that did not (whether by counselling, reprimand or otherwise). Although it is true that the Court, in ordering that the plaintiff both be reprimanded and lose his right to be paid any fee or remuneration went beyond the order sought by the plaintiff, which was that he should be either counselled or reprimanded, it is submitted, that it was always implicit that the Court might, consistently with that case, impose one or more of the penalties available including those ultimately imposed. The critical question, the plaintiff contends, was whether his right to act as a counsellor should have been suspended as determined by the Tribunal and, as to this, he succeeded. (It should be observed, however, that the Court did not hold that an order for suspension could not have been made, had the question been considered by the Tribunal without error. However, in exercising its own discretion, the Court considered that suspension from office was not warranted.)

4. The defendant further submits that the proceedings resulted from the plaintiff’s significant breaches of the duty of disclosure prescribed by s 449 of the Local Government Act 1993 (NSW) and, accordingly, the Court should exercise its discretion not to make any order for costs in his favour. The defendant’s solicitor relies, in particular, on a number of decisions of the Land and Environment Court following successful appeals from penalties imposed by a Magistrate for various failures to comply with development requirements.

5. The defendant also submits that, as parties in proceedings before the Tribunal bear their own costs unless there is some significant departure from good practice (s 60 of the Civil and Administrative Tribunal Act 2013 (NSW)), which is not suggested here, the same approach should be either adopted or, at least, influence the question of costs. The defendant’s solicitor points to the responsibility of the Office of Local Government for bringing disciplinary action in the Tribunal as part of its supervisory functions and it should not be subjected to a costs order where the Tribunal has erred and this Court is therefore required to intervene.

Determination

6. So far as reliance is placed on the decisions of the Land and Environment Court in appeals from Magistrates is concerned, the applicable regime is quite different from that applicable in the present case. Appeals to the Land and Environment Court are governed by s 49 of the Crimes (Appeal and Review) Act 2001 (NSW) which, relevantly, provides that the Land and Environment Court may make such order as to the costs to be paid for either party including the Crown “as it thinks just”. On the other hand, the discretion to be exercised by this Court is found in order 42.1 of the Uniform Civil Procedure Rules, providing that (subject to irrelevant exceptions), “the Court is to order that the costs follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs.” The presumption as to costs may be displaced having regard to what the Court considers to be the responsibility of each party for incurring the costs: Commonwealth v Gretton [2008] NSWCA 117 at [121]. In some cases, such as those under the Family Provision Act1982 (NSW), broader considerations may arise: McCusker v Rutter [2010] NSWCA 318 but the basic rule is in favour of the successful party and the status of the unsuccessful party as a governmental instrumentality is immaterial. Accordingly, the decisions relied on by the defendant must be distinguished.

7. Nor do I consider that the fact that, by statute, orders for costs will not (except for irrelevant reasons) be made against a party in the Tribunal is material in any sense to proceedings in this Court, although it would follow that (absent the exceptions) an order that an unsuccessful plaintiff must pay the defendant’s costs in the Tribunal will not be made.

8. It is true that the defendant commenced the proceedings in the Tribunal because of the plaintiff’s misconduct, which required action to be taken in accordance with the statute and a determination of guilt. That end was satisfied but, rather than abiding the outcome of the appeal, it played an active role in contending, first that leave to appeal should be refused and, secondly, that the appeal should be dismissed. The arguments that were put for the defendant were available and proper, but in the result, failed. The proceedings are not of such a distinct category as to justify departure from the usual order.

Conclusion

9. The Court makes the following order –

1. The defendant is to pay the costs of the plaintiff of and incidental to the appeal, assessed on the ordinary basis.

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Decision last updated: 10 April 2015