Background
These proceedings concerned an application for costs by the Chief Commissioner as the successful respondent in Barsoum v Chief Commissioner of State Revenue [2020] NSWCATAD 282 (“Substantive Proceeding”).
The Chief Commissioner had informed Mr Barsoum on several occasions from 17 June 2016 to 12 August 2020 that if the Chief Commissioner was successful in the Substantive Proceedings, that he would seek costs of the proceedings.
The Statutory Framework
S. 60(1) of the Civil and Administrative Tribunal Act 2013 (NSW)(“CAT Act”) provides that as a general rule, each party to proceedings in the Tribunal is to pay the party's own costs.
However, s.60(2) provides that the Tribunal may award costs if it is satisfied that there are special circumstances warranting an award of costs.
Special circumstances are defined in s.60(3) as:
- whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,
- whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,
- 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,
- the nature and complexity of the proceedings,
- whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,
- whether a party has refused or failed to comply with the duty imposed by section 36(3),
- any other matter that the Tribunal considers relevant.
Chief Commissioner’s submissions
The Chief Commissioner submitted that a determination on the papers, without an oral hearing was appropriate.
The Chief Commissioner submitted that Mr Barsoum’s case had no tenable basis in fact or law (s.60(3)(c), and was misconceived and lacking in substance (s.60(3)(e)) because:
- Mr Barsoum claimed he was not a ‘foreign person’ for the purposes of s 5A of the Land Tax Act 1956 (NSW) at midnight on 31 December 2016 as the words “the individual has actually been in Australia” for 200 days in the 12 months immediately preceding 1 January 2017 (the 2016 year) would be satisfied by an ongoing business relationship with Australia and did not require his physical presence in this country; and in any event, Mr Barsoum claimed he had been physically present in Australia for 200 or more days in the 2016 year.
- Mr Barsoum’s submission disregarded the legislative words “actually been in” Australia and was not supported by any authority;
- Mr Barsoum had conceded that he bore the onus of proving his case; and
- Both sources of documentary evidence before the Tribunal, being documents either summonsed from the Department of Home Affairs or business records produced by Mr Barsoum, demonstrated that he was physically present in Australia for less than 200 days during the 2016 year.
Referring to s.60(3)(d), the Chief Commissioner submitted that the dispute was straightforward and not complex.
Regarding s.60(3)(g), the Chief Commissioner submitted that Mr Barsoum was aware that by proceeding with his application, he risked a costs order; and during the hearing when the Chief Commissioner had already incurred “the vast majority of his costs”, he gave Mr Barsoum the opportunity to concede, free of a costs order, but the offer was declined.
Mr Barsoum’s submissions
Mr Barsoum made no comments regarding the question as to whether a determination on the papers, without an oral hearing was appropriate.
Mr Barsoum’s overarching submission was that there were no special circumstances warranting a costs order, as none of the matters in s.60(3) applied to him. He indicated that “Awarding costs to the respondent would not be in the public interest and would deter the public access to this Tribunal.”
Mr Barsoum’s submissions regarding the specifics of s.60(3) may be summarised as follows:
- Mr Barsoum disputed the Chief Commissioners submissions that he had no tenable basis in fact or law (s.60(3)(c)), or that his case was misconceived and lacking in substance (s.60(3)(e)), arguing that the Tribunal failed to consider “established practices at Australian airports”.
- Mr Barsoum did not make any specific response to the Chief Commissioner’s submission regarding s.60(3)(d) (nature and complexity) but submitted that he had a genuine desire to settle and compromise.
- Regarding s.60(3)(g) (other matters), Mr Barsoum submitted that special circumstances only arise in rare cases such as issues of high public importance and/or the liberty of individuals who are unable to take action on their own behalf.
Decision
In accordance with s.60 and applying the principles articulated by Montgomery SM in Ceepee Pty Ltd v Roads and Maritime Services [2015] NSWCATAD 130, the Senior Member found the Tribunal had power to award costs. Notably, the onus for establishing entitlement to costs in a jurisdiction where the primary rule is that each party bears their own costs rests with the Applicant for costs[1].
The Senior Member noted that parties to proceedings before the Tribunal are required to co-operate with the Tribunal to facilitate “the just, quick and cheap resolution of the real issues in the proceedings”[2].
The Senior Member noted that the Tribunal and Appeal Panel of the Tribunal’s predecessor had determined that for the purpose of a costs order it suffices that the circumstances are out of the ordinary. They do not have to be extraordinary or exceptional.[3].
In relation to s.60(3)(c) and s.60(3)(e), the Senior Member rejected Mr Barsoum’s submissions as providing no legal or factual basis to satisfy his onus. The Senior Member concluded Mr Barsoum’s submissions were largely irrelevant and disregarded numerous findings in the Substantive Proceedings.
Regarding s.60(3)(d) the Senior Member found that Mr Barsoum’s counter-offer to the effect that he pay the Chief Commissioner the equivalent of 27 days absence from Australia rather than the full year’s tax was not evidence of any “genuine desire to settle and compromise”.
In reference to s.60(3)(g) the Senior Member found that Mr Barsoum was aware that by proceeding with his Review Application, he was risking a costs order being made against him. The Senior Member also found that the Substantive Proceedings did not involve issues of “high public importance” or “public interest” nor did Mr Barsoum succeed in any relevant part of the Substantive Proceedings nor did those proceedings involve a “novel” matter which was “beset with great difficulty”.
Orders
- The costs application by the Chief Commissioner be determined on the papers.
- Mr Barsoum pay the costs of the Chief Commissioner, of and incidental to the Substantive Proceedings, as agreed or assessed on the ordinary basis.
https://www.caselaw.nsw.gov.au/decision/178b53caa431fa179a151ef6
