Wright v Commissioner of Police, NSW Police Force (No2)

[2014] NSWCATAD 104

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Wright v Commissioner of Police, NSW Police Force (No2) [2014] NSWCATAD 104
Hearing dates:	22 April 2014
Decision date:	22 July 2014
Before:	N Hennessy LCM, Deputy President J Schwager, General Member M Nasir, General Member
Decision:	The Applicant's application for costs is refused.
Catchwords:	COSTS - whether fair to award applicant one-third of his party/party costs - relevance of the fact that costs far exceed the amount of damages awarded - whether Respondent acted unreasonably in rejecting offers or breached model litigant policy
Legislation Cited:	Anti-Discrimination Act 1977 (NSW) Administrative Decisions Tribunal Act 1997 (NSW) Civil and Administrative Tribunal Act 2013 (NSW) Equal Opportunity Act 1995 (Vic)
Cases Cited:	Assaf v Skalkos [2000] NSWSC 935 Battenberg v The Union Club (No 3) [2005] NSWADT 126 Calderbank v Calderbank [1975] 3 ALL ER 333 Collier v Sunol (No 2) [2006] NSWADT 88 Cultivaust Pty Ltd v Grain Pool Pty Ltd [2004] FCA 1568 Deckert v Victorian Institute of Dryland Agriculture [2006] VCAT 299 De Luca & Anor v Scuccimarra & Anor (No 2) [2007] NSWADT 245 Denmeade v Kempsey Shire Council & Ors (No 3) [2004] NSWADT 54 Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 Dunne v Rail Corporation, NSW (No 2) [2006] NSWADT 335 GLS v PLP (Human Rights) [2013] VCAT Hughes v Narrabri Bowling Motel Limited (No 2) [2012] NSWADT 260 Jenkins v YMCA of Great Lakes Inc. t/as Great Lakes Aquatic & Leisure Centre [2008] NSWADT 335 Jordan v North Coast Area Health Service (No 3) [2005] NSWADT 296 Lynch v Alan Hingston as trustee for the AP Family Trust trading as Grafton Sawmilling [2009] NSWADT 263 Multicon Engineering Pty Ltd v Federal Airports Corp (1996) 138 ALR 425
Category:	Interlocutory applications
Parties:	Grant Wright Commissioner of Police, NSW Police Force
Representation:	Counsel: K Edwards (Applicant) K Eastman SC (Respondent) Mitchell Lawyers (Applicant) Henry Davis York (Respondent)
File Number(s):	121017

reasons for decision

Introduction

1. Mr Wright, a senior constable with the NSW Police Force, applied for an order that the Respondent, the Commissioner of Police, pay one third of his costs. That application followed a decision of the Tribunal that a complaint of direct discrimination on the ground of carer's responsibilities under the Anti-Discrimination Act 1977 (NSW), had been substantiated: Wright v Commissioner of Police NSW Police Force [2014] NSWCATAD 16. The Commissioner was ordered to pay Mr Wright damages of $5,000. Three complaints of indirect discrimination and two complaints of victimisation were not substantiated. Mr Wright estimates his legal costs to be approximately $70,000.

1. Mr Wright is a single parent with two children who live with his former wife in Goulburn. At the time of the alleged breaches of the Anti-Discrimination Act Mr Wright was stationed at Hillston in the central west of New South Wales. The four complaints of "indirect" discrimination relate to requiring Mr Wright to attend for duty as rostered during various periods in the Easter school holidays in 2011, in May 2011 and over the Christmas school holidays in 2011 and 2012. Mr Wright also complained that subsequent disciplinary action for non-attendance on those days constituted indirect discrimination. The complaint which was substantiated was a complaint of direct discrimination because his applications in April 2011 to be transferred to two other towns in western New South Wales were refused.

1. There are two main bases for the costs application. The first is the fact that Mr Wright's legal costs significantly exceed the amount of damages he was awarded. Though partially successful, he will be out-of-pocket unless costs are awarded. Secondly, it was submitted that the Commissioner of Police unreasonably refused three offers of settlement that Mr Wright made. As a model litigant, those refusals were said to justify a partial costs order. The Commissioner opposes the application for costs.

1. We have decided to refuse the application for costs. In summary, the rule to be applied is that each party is to pay his or her own costs unless it is fair, taking into account certain specified matters and any other matter the Tribunal considers relevant, for one party to pay some or all of another party's costs. In this case the fact that the costs are significantly in excess of the damages awarded does not make it fair to award costs. The Commissioner of Police did not act unreasonably or in breach of the conduct expected of a model litigant in rejecting Mr Wright's offers of settlement.

The costs rule

1. On 1 January 2014 the jurisdiction of the Administrative Decisions Tribunal was taken over by the Civil and Administrative Tribunal (NCAT). The costs provisions in the Anti-Discrimination Act and the Administrative Decisions Tribunal Act 1997 (NSW) would have applied in respect of the proceedings had the Civil and Administrative Tribunal Act 2013 and the relevant amending Acts not been enacted. Because these proceedings are "pending proceedings" those statutes, as then in force, continue to apply: Civil and Administrative Tribunal Act 2013, Sch 1, cl 6(1) and 7(3). (I note that the current costs rule set out in s 60 of the Civil and Administrative Tribunal Act 2013, requires 'special circumstances' before the Tribunal may make a costs order.)

1. Section 110 of the Anti-Discrimination Act gave the Tribunal power to award costs under s 88 of the Administrative Decisions Tribunal Act in respect of proceedings before the Tribunal in relation to a complaint. Under that provision, the general rule is that each party pays his or her own costs. Section 88 provided that:

(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 costs application

1. Mr Wright applied for costs on 5 September 2013 before the decision was handed down. In that application he applied for his party/party costs mainly on the basis of the Commissioner's unreasonable refusal of three offers of settlement. The application also submitted that the amount of legal costs compared to the amount recovered is a relevant factor when exercising the discretion to award costs. The decision of Jordan v North Coast Area Health Service (No 3) [2005] NSWADT 296 (Jordan) was cited as authority for that proposition.

1. When handing down its decision in the substantive matter on 24 February 2014, the Tribunal directed that the parties make any further application for costs within particular time frames: Wright v Commissioner of Police NSW Police Force [2014] NSWCATAD 16 (24 February 2014). Mr Wright renewed his application for costs. Because only one of his complaints had been substantiated, he applied for one-third of his costs. The basis for that application was the decision in Jordan. Mr Wright also relied on his previous submissions in support of his application.

Respondent's response to costs application

1. The Commissioner of Police opposes the application for costs on four main bases.

(1)   Mr Wright has not provided evidence of the amount of costs incurred.

(2)   Even if Mr Wright's costs significantly exceed the damages awarded, that does not make it fair in the circumstances of this case to award costs.

(3)   It was not unreasonable, nor in breach of the model litigant policy for the Commissioner of Police to reject Mr Wright's offers of settlement.

(4)   One of Mr Wright's complaints was substantiated but there is no justification on that basis for one- third of his costs to be awarded.

Amount of costs

1. When these proceedings were heard in 2013, the Costs Guideline, issued on 1 October 2009 and re-issued on 30 April 2010, applied. That Guideline requested that a person applying for costs file and serve a precise statement of the amount of costs actually sought and its components. The reasons for that request were so that the Tribunal and the other party knew the amount claimed and to avoid costly arguments about the quantum of costs.

1. In his first submission dated 5 September 2013, the applicant stated that his costs to that date were $67,099.00. The submissions noted that an amount of $18,972 plus GST had been discounted by the Applicant's legal practitioners having regard to Mr Wright's financial situation. In the second submission dated 6 March 2014, Mr Wright noted that his costs were approximately $70,000.

1. The submissions were prepared by Mr Wright's counsel, Ms Edwards. The Tribunal accepts that the sum is an estimate of the amount of costs for which her client is liable. If the Tribunal had made a costs order it may have required a more detailed breakdown of the costs incurred so as to avoid any need for the costs to be assessed under the Legal Profession Act 2004. But the failure to verify the amount of costs in the application is not, by itself, a reason for not making a costs order.

Costs in excess of damages

1. Mr Wright said that if he had been transferred to another police station closer to his children that would have made a significant difference to him. Mr Wright submitted that the case "was never about a financial outcome, but a qualitative positive change to the Applicant's work life allowing him certainty of ongoing employment in the context of his carer's responsibilities." While we accept that Mr Wright's main focus was not a financial outcome, he sought $20,000 in damages and was awarded $5,000. The complaint was, at least in part, about a financial outcome.

1. We find that the costs in this case far exceed the amount of damages that were ultimately awarded. We must determine whether that is a relevant matter when considering a costs application: Administrative Decisions Tribunal Act, s 88(1A)(e). The Tribunal considered it to be a relevant matter under the costs rule that applied to proceedings under the Anti-Discrimination Act prior to 1 January 2009. The costs rule at that time was in s 110 of the Anti-Discrimination Act:

Each party to an inquiry is to pay his or her own costs, unless in the Tribunal's opinion there are circumstances that justify making a costs order, as it thinks fit.

1. In a decision made in 2005, Jordan v North Coast Area Health Service (No 3) [2005] NSWADT 296, the Tribunal ordered the North Coast Area Health Service to pay Ms Jordan $7,500 for breach of the sex discrimination provisions of the Anti-Discrimination Act. Ms Jordan failed to substantiate her complaints of victimisation. The Tribunal awarded her three-quarters of the costs incurred within a certain period. Her costs ($14,413.41) considerably exceeded the amount of compensation she has been awarded. The costs award was said to be made 'in the context' of the fact that there was a $40,000 limit on damages: at [15]. (The upper limit for damages is now $100,000.)

1. In Jordan, the Tribunal concluded that the rights conferred by the Anti-Discrimination Act should not be undermined by the cost of vindicating them and came to the following conclusion at [35]:

In light of the above account of the Tribunal's approach over the years, the public policy considerations in deterring victims of discrimination from seeking redress, and the injustice that would be done to a victim of discrimination who is vindicated but at a net cost to themselves, we are satisfied that there are cases when single factor will be enough alone to justify the making of a costs order. This is such a case. In our opinion there are circumstances that justify making a costs order: Ms Jordan's legal costs considerably exceed the amount of compensation she has been awarded for having been the victim of unlawful discrimination in the circumstances we describe above.

1. The Tribunal applied this principle in subsequent cases governed by the now repealed s 110 of the Anti-Discrimination Act: Dunne v Rail Corporation, NSW (No 2) [2006] NSWADT 335 at [28]; Collier v Sunol (No 2) [2006] NSWADT 88 at [36] to [43]. Since the law changed on 1 January 2009, no decision of the Tribunal has dealt with the issue of whether the disparity between costs and damages is a relevant consideration when deciding whether to award costs under s 88 of the Administrative Decisions Tribunal Act. But that question has been considered by the Victorian Civil and Administrative Tribunal (VCAT) in the context of a relevantly identical provision, s109(2) of the Victorian Civil and Administrative Tribunal Act 1998.

1. In proceedings under the Equal Opportunity Act 1995 (Vic), VCAT has recognised that if costs are not recoverable, the real value of an award may be significantly eroded: GLS v PLP (Human Rights) [2013] VCAT 1367 at [35]. But it has also noted that if that were to be a decisive factor, it would be fair to award costs in virtually every case where an applicant had substantiated his or her complaint but the costs exceed the damages awarded. In Deckert v Victorian Institute of Dryland Agriculture [2006] VCAT 299 [38] VCAT expressed the view that if that were the case, the general rule that costs lie where they fall would be seriously undermined.

1. Proceedings under the Anti-Discrimination Act can be complex and technical, both factually and legally. That is especially the case for complaints, such as those of Mr Wright, which involve indirect discrimination. It would be extremely difficult for a non-lawyer to successfully gather the evidence and present the submissions to substantiate such a complaint. One effect of the right to, and in many cases the need for, legal representation is that costs will often exceed any damages awarded. The benefit of the no-costs rule to applicants is that complainants are less likely to be deterred from litigating if they are not at risk of paying the Respondent's costs if unsuccessful.

1. It is logical for there to be a presumption that each party pays their own costs when legal representation is not permitted or is generally unnecessary. But when legal representation is both permitted as of right and is at least desirable in most cases, a no costs presumption may discourage people with meritorious complaints from litigating.

1. Nevertheless, the situation in 2013 (and indeed today) is that there is both a right to legal representation and a presumption that each party pays his or her own costs. Parliament cannot have intended that where an applicant is successful, but the amount of damages awarded is less than the costs incurred, he or she should be entitled to costs but a successful respondent, who may also be significantly out of pocket, should not. The implication of such an approach is that, at least in some circumstances, costs should follow the event for applicants but not for respondents. We do not consider that the amount of costs incurred relative to any damages awarded is a relevant factor, at least in the circumstances of this case.

Rejection of settlement offers

1. Mr Wright provided copies of three settlement offers his solicitors had made on his behalf on 5 June 2012, 24 September 2012 and 10 May 2013. He submitted that, as a government agency bound by the model litigant policy, the Commissioner's refusal of those offers was unreasonable. We note that despite Mr Wright's reliance on Battenberg v The Union Club (No 3) [2005] NSWADT 126 in support of this submission, that case does not relate to the reasonableness of rejecting a settlement offer.

1. The fact that an offer of settlement has been unreasonably refused is not a factor listed in s 88 as relevant when determining whether it is fair to award costs. But the Tribunal may take into account any matter that it considers relevant: ADT Act, s 88(1A)(e). In costs applications in the Retail Leases matters, the Administrative Decisions Tribunal has taken into account the fact that:

(a)   a successful party in proceedings has made an offer of compromise of the dispute before the conclusion of the proceedings;

(b)   the unsuccessful party has unreasonably rejected the offer; and

(c)   the terms of the offer were more favourable to the unsuccessful party than the orders made by the Tribunal: De Luca & Anor v Scuccimarra & Anor (No 2) [2007] NSWADT 245 (10 October 2007).

1. Although the decision in De Luca & Anor v Scuccimarra & Anor (No 2) [2007] NSWADT 245 was made when the test for an award of costs was "special circumstances", this principle has also been taken into account in relation to the test of fairness in various divisions of the Administrative Decisions Tribunal including in the Equal Opportunity Division: Denmeade v Kempsey Shire Council & Ors (No.3) [2004] NSWADT 54; Lynch v Alan Hingston as trustee for the AP Family Trust trading as Grafton Sawmilling [2009] NSWADT 263; Jenkins v YMCA of Great Lakes Inc. t/as Great Lakes Aquatic & Leisure Centre [2008] NSWADT 335 at [28]; Hughes v Narrabri Bowling Motel Limited (No 2) [2012] NSWADT 260.

1. In the Supreme Court and the Federal Court there is provision for the payment of indemnity, rather than party/party, costs where a so-called "Calderbank" type offer has been made: Calderbank v Calderbank [1975] 3 ALL ER 333; Multicon Engineering Pty Ltd v Federal Airports Corp (1996) 138 ALR 425; Assaf v Skalkos [2000] NSWSC 935; Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602. While the principles applied in these cases come from a different legal and factual context, they provide some guidance as to how this Tribunal should approach its task. In particular:

(1)   when determining whether the offer is 'reasonable' all the surrounding circumstances must be examined including whether the offer is genuine and realistic when it was made and the time given to respond: Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 at [14] - [17];

(2)   to be reasonable, an offer should contain an element of compromise: Assaf v Skalkos [2000] NSWSC 935 at [61]; and

(3)   an offer of settlement which includes an apology does not have to correspond exactly with the findings of the ultimate decision maker, the question is whether the terms of the apology were, at the relevant time, reasonable: Assaf v Skalkos [2000] NSWSC 935 at [66] - [71].

1. Mr Wright did not submit that the terms of any of the offers were more favourable to the Commissioner of Police than the orders made by the Tribunal. Each of Mr Wright's offers involved agreements that he be transferred from his existing location. That was not an order the Tribunal made. Only the third offer mentioned the principles in Calderbank v Calderbank [1976] Fam 93 and requested payment of damages of $8,000. The other elements of the offers related to re-crediting of leave entitlements, warnings given to Mr Wright and adverse findings made about him.

1. On the basis of the documentary evidence, and the affidavit evidence of Scott Joseph, a solicitor employed by the Commissioner of Police, we are not satisfied that the rejection of the settlement offers was unreasonable in light of the decision the Tribunal ultimately made.

1. The Federal Court has made findings as to whether the Crown has behaved as a model litigant when determining an application for indemnity costs: Cultivaust Pty Ltd v Grain Pool Pty Ltd [2004] FCA 1568 at [18]. Such compliance may be a relevant factor when determining a costs application under s 88.

1. The Model Litigant Policy for Civil Litigation requires a model litigant to "act honestly and fairly in handling claims and litigation including by:

paying legitimate claims without litigation, including making partial settlements of claims or interim payments, where it is clear that liability is at least as much as the amount to be paid

1. Again, on the basis of the evidence, we are not satisfied that the Commissioner of Police has breached the Model Litigant Policy by rejecting Mr Wright's offers of settlement.

1. Having decided not to award Mr Wright any costs, it is not necessary to consider whether the claim for one-third of his costs is justified.

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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: 22 July 2014