The Estate of Babich v South Australian Superannuation Board (No 2) - [2019] SADC 54

DISTRICT COURT OF SOUTH AUSTRALIA
(District Court Administrative and Disciplinary Division)
THE ESTATE OF BABICH v SOUTH AUSTRALIAN SUPERANNUATION BOARD (No 2)
[2019] SADC 54
Decision of His Honour Judge Chivell
8 May 2019
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL MATTERS
Costs sought by the successful party (appellant) in an appeal in the Administrative and Disciplinary Division of this Court. Whether order for costs necessary in the interests of justice – s 42G(2) of the District Court Act. Whether Calderbank offer had been made. Whether any costs award ought be reduced for time spent on grounds of appeal which were not successful.
Held: Appellant should have its costs of the appeal on a party-party basis.
District Court Act 1991 (SA) s 42G(2); Southern State Superannuation Act 2009 (SA) s 29(3); Civil Procedure South Australia LexisNexis Butterworths; The Estate of Babich v South Australian Superannuation Board [2019] SADC 25; Moore v Registrar of the Medical Board (No 2) (2002) 219 LSJS 448; [2001] SADC 141; Marksman Training Systems Pty Ltd v The Registrar of Firearms (No 3) [2015] SADC 16; Tamawood Limited v Paans [2005] QCA 111; Khan v The Delegate of the Registrar of Motor Vehicles (No 2) [2019] SADC 22; Marin v The Chiropractic & Osteopathy Board of South Australia (No 2) [2009] SADC 43; Baygol Pty Ltd v Foamex Polystyrene Pty Ltd [2005] FCA 1089, referred to.

THE ESTATE OF BABICH v SOUTH AUSTRALIAN SUPERANNUATION BOARD (No 2)
[2019] SADC 54

This is a dispute about the costs of litigation.
On 6 March 2019, I allowed an appeal by the estate of Mrs Babich from decisions of the South Australian Superannuation Board refusing to grant an extension of time within which to roll over her superannuation fund so that her death and total and permanent incapacity policy could continue after she left the public service.
My reasons for allowing the appeal were published at [2019] SADC 25.[1]
[1] The Estate of Babich v South Australian Superannuation Board.
In short, having regard to the factors set out in s 29(3) of the Southern State Superannuation Act 2009 (SA), I found that:
(i)the length of the delay was not unreasonable;[2]
(ii)the delay was explained by Mrs Babich’s lack of knowledge of her right to roll over her account and of the 60-day time limit within which she should have done so, and the unhelpful, and in some cases misleading, information provided to clients by the Board;
(iii)Mrs Babich and her estate suffered hardship by the refusal to extend the time limit;
(iv)Mrs Babich suffered unfairness, and that unfairness was caused by the Board, for the reasons expressed in (ii) above.
[2] At [22].
Section 42G(2) of the District Court Act 1991 (SA) provides that ‘no order for costs is to be made (on an appeal pursuant to Part 6, Division 2 of the Act) unless the Court considers such an order to be necessary in the interests of justice’.
In Civil Procedure South Australia, the learned editor notes:[3]
An order for costs is not to follow the event, but is only to be made where there is some unusual or out of the ordinary feature which makes it in the interests of justice to order costs.
Moore v Registrar of the Medical Board (No 2)[4] per Smith DCJ is cited in support of that proposition. However, Marksman Training Systems Pty Ltd v The Registrar of Firearms (No 3)[5] per Tilmouth DCJ is also cited for the proposition that:
… the sole criterion is the interests of justice, and is not confined by qualifications such as exceptional, unique etc.
[3] LexisNexis Butterworths, Civil Procedure South Australia, vol 1 (at Service 175) [DCA s 42G.1].
[4] (2002) 219 LSJS 448; [2001] SADC 141.
[5] [2015] SADC 16 at [16]-[17].
I reject the submission that s 42G(2) requires some unusual or special circumstances before an award of costs can be made. To narrow the discretion in that way puts an unwarranted gloss on the discretion granted by the section. Section 42G goes no further than providing that an order for costs to a successful party is not automatic, and that there must be some good reason which justifies an order for costs.
In Tamawood Limited v Paans,[6] Kean JA (as he then was) interpreted similar Queensland legislation, two sections of which were as follows:
[6] [2005] QCA 111.
70 Purposes of div 7
The main purpose of this division is to have parties pay their own costs unless the interests of justice require otherwise.
71 Costs
…
(5)A party to a proceeding is not entitled to costs merely because—
(a) the party was the beneficiary of an order of the tribunal; or
(b) the party was legally represented at the proceeding.
…
Keane JA said:
[24] The language of the provisions of the Act to which I have referred is sufficiently clear to negate the proposition that success in the proceedings is sufficient to establish a prima facie entitlement to the beneficial exercise of the discretion conferred by s 71(1) of the Act …
[28] The existence of the provisions referred to in the preceding paragraph cannot alter the ordinary meaning of s 70 and s 71 of the Act. In any event, the existence of this extensive array of special provisions relating to orders for costs in particular circumstances tends, in my view, to confirm that s 70 and s 71(1) are intended to impose a general rule that good reason must be shown in terms of the interests of justice for making an award of costs in proceedings before the Tribunal.
As to the suggestion that the reason justifying an order for costs must be ‘unusual or out of the ordinary’, Keane JA addressed the converse proposition that, ordinarily, no order for costs should be made. His Honour said:[7]
Whether it will "ordinarily" be the position that no order as to costs is made by the Tribunal will depend on whether the facts of the particular cases which come before the Tribunal "ordinarily" exhibit features suggesting that the interests of justice require that a party have a costs order made in their favour.
[7] At [16].
I interpret his Honour to mean that whether the reason is ordinary or otherwise, usual or otherwise, is irrelevant. The question is whether the reason is good enough to justify a conclusion that it is in the interests of justice to make the order.
As to the application of these rules, Keane JA observed:
[32] If orders for costs were not to be made in favour of successful parties in complex cases, then just claims might not be prosecuted by persons who are unable to manage complex litigation by themselves. Such a state of affairs would truly be contrary to the interests of justice; and an intention to sanction such a state of affairs cannot be attributed to the legislature which established the Tribunal.
[33] … In the absence of countervailing considerations, where a party has reasonably incurred the cost of legal representation, and has been successful before the Tribunal, it could not rationally be said to be in the interests of justice to allow that success to be eroded by requiring that party to bear the costs of the representation which was reasonably necessary to achieve that outcome.
Those observations are particularly apposite to the present case. The issues were relatively complex. The fact that some of the issues were not ultimately pursued does not mean that they were not legitimately considered. The amount involved, $138,000, is substantial (as far as the estate is concerned) but would be seriously eroded if an order for costs is not made. The case (including the costs issue) was extensively argued, and costs will be substantial. In my view, appellants such as the present one would be deterred from bringing legitimate appeals if a costs order is not made in these circumstances.
This case is to be distinguished from cases such as Khan v The Delegate of the Registrar of Motor Vehicles (No 2)[8] and Marksman,[9] where regulatory authorities have made administrative decisions in relation to a driving instructor’s licence and in relation to licences under the Firearms Act. A further example is Marin v The Chiropractic & Osteopathy Board of South Australia (No 2)[10] in relation to professional misconduct. In such cases, the authorities appealed from were exercising a regulatory function in the public interest.
[8] [2019] SADC 22.
[9] Supra.
[10] [2009] SADC 43.
The situation is very different where, as here, the respondent is the administrator of a superannuation fund for the benefit of its members, and the appellant is seeking to exercise a private right.
Finally, if I have taken an unduly broad approach to s 42G(2), I would hold that the circumstances here are unusual in that the Board had two opportunities to review its practices and documentation, and on each occasion failed or refused to find that they were seriously inadequate. In those circumstances, it is in the interests of justice to order costs against it.
Respondent’s Alternative Contention
The respondent submitted, in the alternative to its opposition to costs being granted at all, that if granted, the appellant’s costs should be reduced by 30% because of time expended on grounds of appeal which were ‘ultimately never going to be successful’.[11]
[11] Respondent’s Summary of Argument Concerning Costs, [17].
I reject this submission. As I have already observed, I consider that it was legitimate for issues such as the nature of the relationship between Mrs Babich and the Board, the duties owed by the Board and the like to be raised. The appellant did not waste resources by persisting to argue issues after it was apparent that they were inarguable. Concessions were appropriately made. I decline to reduce the appellant’s entitlement to costs.
A Calderbank Offer?
On 21 November 2018, the appeal was adjourned for further argument. On 4 December 2018, the solicitor for the appellant, Mr Xenophon, wrote to the respondent:[12]
We respectfully invite your client to indicate whether it is prepared to agree to an order extending the time within which our client was required to apply to transfer her insurance, so as to retain the benefit of the Death and TPD policy attached to her Triple S superannuation fund, before our client incurs any further costs.
Otherwise, our client will simply proceed with her appeal and, in the likely event that she succeeds, produce this letter on the question of costs.
[12] Exhibit “NX-1” to Affidavit of Nicholas Xenophon sworn 12.3.19.
I accept the respondent’s submission that an invitation to another party to capitulate or surrender is not a Calderbank offer, citing Baygol Pty Ltd v Foamex Polystyrene Pty Ltd.[13] The ‘invitation’ neither enhances nor detracts from the appellant’s entitlement to party-party costs.
[13] [2005] FCA 1089 at [12] per Tamberlin J.
I order that the appellant should have its costs of the appeal on a party-party basis.