Barsoum v Chief Commissioner of State Revenue [2021] NSWCATAP 266

Background

At first instance, the Tribunal affirmed the Chief Commissioner’s decision to issue an assessment of the Appellant’s liability for surcharge land tax for the 2017 tax year (“the substantive decision”). During the substantive proceedings, the Appellant failed to establish on the balance of probabilities that he had been physically present in Australia for 200 or more days during the 2016 calendar year and therefore was not a “foreign resident” within the meaning of Foreign Acquisitions and Takeovers Act 1975 (Cth) (“FAT Act”), as given effect by the section 5A(1) of the Land Tax Act 1956 (NSW).

The Tribunal subsequently ordered the Appellant to pay the Chief Commissioner’s costs, including costs incidental to the substantive proceedings, as agreed or assessed on the ordinary basis (“the costs decision”).

The Appellant then sought a review by the Appeal Panel of the costs decision, but not the substantive decision.

The Statutory Framework

Section 60 of the Civil and Administrative Tribunal Act 2013 (NSW) (“CAT Act”) enumerates the principles applicable to costs orders.

As noted by the Appeal Panel at [24], section 80(2) of the CAT Act required the Appellant to demonstrate that there was either an error on a question of law or that permission to appeal should be granted to appeal on grounds other than a question of law.

Submissions

The Appellant made submissions pertaining to both the substantive and costs decisions in seeking leave to appeal. The grounds of objection raised to the substantive decision by the Appellant were summarised at [28].

With respect to the costs’ decision, the Appellant alleged that the Tribunal erred in a number of respects:

The Appellant alleged the matter was of public interest and of general importance.

Counsel for the Respondent submitted that the Tribunal did not err in any relevant respect as alleged by the Appellant. In relation to the Respondent’s statement to the Appellant, the Chief Commission did not dispute that such discussions occurred or were taken into account by the Tribunal, but submitted that they did not constitute a “warning” in the nature of a threat as argued by the Appellant (at [49]).

Decision

The Appeal Panel rejected the grounds raised by the Appellant against the substantive decision because the Appellant only appealed against the costs decision.

Turning to the costs’ decision, the grounds for the costs appeal, and the Appeal Panel’s decision on each ground were:

1. The Tribunal’s decision to determine the costs proceedings “on the papers” was a denial of natural justice:
   
   Decision: The Appeal Panel noted that the Appellant failed to avail himself of the opportunity to make submissions on the issue of whether the question of costs should be decided “on the papers”, and therefore there was no denial of natural justice (at [33]).
2. The Tribunal erred in awarding costs on an indemnity basis:
   
   Decision: The Appellant was incorrect in arguing that the costs orders were made on an indemnity basis rather than a party/party basis (at [34]).
3. The Tribunal applied an incorrect onus and standard of proof:
   
   Decision: The Tribunal correctly identified that the onus is on the applicant for costs (the Chief Commissioner) (at [37]); and the balance of probabilities was the correct standard (at [39]).
4. The Tribunal erred in failing to recognise that the making of a costs order was dependent upon the substantive proceedings being of a complex nature:
   
   Decision: The Appellant misconstrued the decision in The Owners, Strata Plan No 55773 v Rodden (Costs) [2020] NSWCATAP 197, (at [46]) in justifying the objection. The correct view of the case and s.60(3)(d) of the CAT Act is that “the nature and complexity of the proceedings” is only one factor the Tribunal may have regard to in deciding whether there are “special circumstances” justifying departure from the ordinary award of costs. Complexity alone was insufficient (at [42]).
5. The Tribunal failed “to exercise its discretion in a judicial manner”:
   
   Decision: The Appellant provided no evidentiary basis for concluding that the Tribunal acted harshly or capriciously in determining that the Appellant’s application lacked merit (at [44]). Moreover, imbalances of power are not mandatory considerations of the Tribunal in exercising its discretion (at [57]).
6. The Tribunal erred in finding that Mr Barsoum’s conduct of the proceedings was “out of the ordinary”:
   
   Decision: It was indeed at least “out of the ordinary” for the Appellant to apply for administrative review where his application lacked merit and consequently no erroneous conclusion was made by the Tribunal (at [45]).
7. The Tribunal erred in finding that the substantive proceedings were misconceived and lacking in substance, within the meaning of s 60 (3) (e) of the NCAT Act:
   
   Decision: Mr Barsoum sought to re-agitate several of these findings and conclusions when appealing from the costs decision. As he did not appeal from the substantive decision, he could not on appeal contend that the Tribunal made an error in those reasons for decision. Based on the findings and conclusions in the substantive proceedings, the Tribunal’s conclusion that Mr Barsoum’s application was misconceived and lacking in substance was open to it (at [47]).
8. The Tribunal erred in taking into account the Chief Commissioner’s statements to Mr Barsoum, which were alleged to have alerted him to the possibility of an application for costs:
   
   Decision: The fact that Mr Barsoum was on notice of the Chief Commissioner’s view that his application lacked substance, was a relevant consideration when exercising the costs discretion. It was one of several matters that the Tribunal took into account. There is no statutory or other basis for characterising it as a forbidden consideration.
9. The Tribunal erred by taking into account that Mr Barsoum has been admitted as a lawyer for 10 years:
   
   Decision: Mr Barsoum’s status as a lawyer is not particularly relevant when considering whether his application is misconceived or lacks substance, but the Tribunal was not forbidden from taking it into account (at [50]).
10. The Tribunal erred by failing to take into account hardship:
    
    Decision: The Appellant provided no evidence demonstrating the costs decision would cause hardship due to his financial position and health (at [53]). Further, the Tribunal’s power to make costs orders is not diminished by the need to resolve matters cheaply (at [55]).
11. The Tribunal failed to fulfil the objectives in section 3 of the NCAT Act:
    
    Decision: The Tribunal did not fail to fulfil any objectives in section 3, and it made costs orders in exercise of its powers and discretions under section 60 (at [56]).
12. The Tribunal erred by giving inadequate weight to the “imbalance of power” between the parties:
    
    Decision:This is not a relevant consideration which the Tribunal must take into account when exercising the discretion to award costs.
13. The Tribunal erred in taking into account the fact that Mr Barsoum had not appealed from the substantive decision, but only from the costs decision:
    
    Decision: The Tribunal merely emphasised that the substantive decision was beyond the scope of any appeal following the costs decision (at [59]).
14. The case “raises matters of public interest and general importance”
    
    Decision: The Appeal Panel noted that the matter was neither unique nor significant in deliberating the proper construction of the 200 days test and the phrase “actually been in Australia” (at [61]).

Orders

The Appeal Panel refused leave to appeal and dismissed the appeal.

Link to decision

https://www.caselaw.nsw.gov.au/decision/17bc8d515a2a92288cff4d45