Kithock Pty Limited v The Commissioner for Australian Capital Territory Revenue [1999] ACTSC 144 (24 December 1999)

Last Updated: 16 October 2000

Kithock Pty Limited v The Commissioner for Australian Capital Territory Revenue

[1999] ACTSC 144 (24 December 1999)

CATCHWORDS

COSTS - power of Supreme Court to award costs in all matters - whether a reference of questions of law under s 48 of the Administrative Tribunals Act 1989 is a matter - it is.

COSTS - agreement by solicitors as to liability for costs if questions answered in negative - whether there was agreement if questions answered in affirmative - there was not - no question of principle.

Administrative Appeals Tribunal Act 1989, s 48

Supreme Court Act 1933, s 23

Re Wakim; Ex parte McNally [1999] HCA 27; (1999) 163 ALR 270

The Constitution, Chapter III

No. SC 747 of 1998

Judge: Miles CJ

Supreme Court of the ACT

Date: 24 December 1999

IN THE SUPREME COURT OF THE )

) No. SC 747 of 1998

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: KITHOCK PTY LIMITED

ACN 055 714 944

Trading as ARNOLD'S AUTOS

Applicant

AND: THE COMMISSIONER FOR

AUSTRALIAN CAPITAL TERRITORY REVENUE

Respondent

ORDER

Judge: Miles CJ

Date: 24 December 1999

Place: Canberra

THE COURT ORDERS THAT:

1. The respondent pay the applicant's costs of the proceedings, including the costs incurred in the application for costs subsequent to the questions being answered.

1. On 11 August 1999 I answered questions of law referred to the Court for decision under s 48 of the Administrative Appeals Tribunal Act 1989 (the AAT Act). The applicant subsequently applied for an order for costs, which was opposed and written submissions were received.

2. I deal first with the submission made by the respondent that there is no power in the Court to make an order for costs in the exercise of its jurisdiction under s 48. The section makes no reference to costs whatever. It provides:

"(1) The Tribunal may, of its own motion or at the request of a party, refer a question of law arising in a proceeding before the Tribunal to the Supreme Court for decision but -

(a) in the case of a proceeding before the Tribunal constituted by 2 or more members at which a presidential member presides -- the question shall not be so referred without the concurrence of that presidential member; or

(b) in any other case - the question shall not be so referred without the concurrence of the President.

(2) The Supreme Court has jurisdiction to hear and determine a question of law referred to it under this section.

(3) Where a question of law arising in any proceeding has been referred to the Supreme Court under this section, the Tribunal shall not, in that proceeding -

(a) give a decision to which the question is relevant while the reference is pending; or

(b) proceed in a manner or make a decision, that is inconsistent with the opinion of the Supreme Court on the question".

3. It is reasonably clear from these provisions that when a question of law is referred to the Supreme Court under s 48, the Supreme Court does not exercise jurisdiction to the proceeding in which the question of law arises. That proceeding remains in the AAT. However, in order to consider the question referred there must be a proceeding in the Supreme Court.

4. The power of the Supreme Court to award costs is contained in s 23 of the Supreme Court Act 1933 (the Supreme Court Act), which provides as follows:

"23(1) The court shall have jurisdiction to award costs in all matters brought before the court, including matters dismissed for want of prosecution.

(2) Subject to any other law of the Territory (including rules of court), the court may determine -

(a) the amount of costs of and incidental to proceedings in the court, including the administration of an estate or trust; and

(b) by whom and to what extent such costs are to be paid.

(3) Nothing in this section shall alter the practice which would otherwise be followed in any criminal cause or matter or in proceedings on the Crown side of the court."

5. The term "matter" is defined by s 2 to include "any proceeding in the Supreme Court, whether between parties or not, and also any incidental proceeding in a cause or matter".

6. There is a long line of authority in the High Court about what constitutes a "matter", made necessary by the separation of powers between the federal judiciary on the one hand and the legislative and executive arms of federal government on the other recognized and made apparent by, inter alia, Chapter III of the Constitution. This Court, however, is not a court created under Chapter III of the Constitution and its jurisdiction is not dependent upon a proceeding before it answering the description of a matter in that sense: Re Wakim; Ex parte McNally [1999] HCA 27; (1999) 163 ALR 270.

7. The proceeding in the Court pursuant to the reference of the questions of law by the AAT is clearly a matter within s 23 of the Supreme Court Act and there can be no question that the Court has power to award costs in that matter.

8. The applicant submitted that the proceedings were in the nature of a contest between it and the respondent in which the applicant emerged as the successful party and that the normal rule that costs follow the event should apply.

9. It was submitted on behalf of the respondent that costs should not follow the event because of an agreement reached between the parties. Order 37 r 7 was relied on. It provides:

"The parties to a special case may, if they think fit, enter into an agreement in writing that, upon the judgment of the Court being given in the affirmative or negative of the question or questions raised by the special case, a sum of money, fixed by the parties or to be ascertained by the Court or in such manner as the Court directs, shall be paid by one of the parties to the other of them, either with or without costs of the cause or matter, and the judgment of the Court may be entered for the sum so agreed or ascertained, with or without costs (as the case may be), and execution may issue forthwith upon such judgment unless otherwise agreed or unless stayed upon appeal."

10. The agreement is alleged to be constituted by correspondence between the parties. It is not necessary to set out the correspondence in detail. It is common ground that the agreement in the correspondence made provisions for costs in the event of the questions being answered in the negative. The dispute now is whether the agreement provided that there would be no order or application for an order for costs in the event that the questions were answered in the affirmative or whether there was simply no agreement as to allocation of liability for costs in the event of affirmative answers. Some reference therefore to the correspondence is necessary.

11. On 16 October 1998 the respondent's solicitor wrote to the applicant's solicitor reiterating that the respondent objected to the "transfer" of the question of law to the Supreme Court for determination. The letter enclosed a copy of the special case (presumably drafted on behalf of the applicant) signed by counsel for the respondent and went on to state that it was being delivered "in escrow" pending the applicant's entering into an agreement in these terms:

"That if the questions raised by the applicant in the special case are answered by the Supreme Court in the negative, then the applicant will pay the respondent's costs in the agreed sum of $3,750.00."

12. It is not clear whether the applicant's solicitors responded to this proposal affirmatively, negatively or at all. However, they did suggest to the respondent's solicitors that the parties approach the Court to have the questions considered and answered by a Full Court. The respondent's solicitors on 9 March 1999 wrote to the solicitors for the applicant stating that they would not oppose a reference to a Full Court so long as the amount provided for in the agreement, or proposed agreement, was increased to $8,500. After a number of requests to respond to this latest proposal, the applicant's solicitor wrote on 28 April 1999 stating that "my client does not agree to the variation of costs agreement as set out in your letter of 9 March 1999".

13. In my view, there is nothing in this exchange of correspondence to indicate an agreement by the applicant's solicitors that they would not seek an order for costs if the questions were answered in the affirmative. Despite an agreement as to what would happen in relation to costs if the answers were in the negative, there was no agreement, either express or implied, as to liability for costs in the event of the questions being answered in the affirmative. It was but faintly suggested on behalf of the respondent that the applicant's solicitors had conducted themselves in a way such that they were estopped from asserting that the applicant was entitled to costs when the questions were answered in the affirmative. No basis for estoppel has been shown to exist.

14. I order that the respondent pay the applicant's costs of the proceedings, including the costs incurred in the application for costs subsequent to my answering the questions referred.

I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, the Chief Justice.

Associate:

Date: 24 December 1999

Counsel for the applicant: Mr G Corr

Solicitor for the applicant: Michael Baumann, Solicitor

Counsel for the respondent: Mr D R Jarvis

Solicitor for the respondent: ACT Government Solicitor

Submissions of applicant: 25 August 1999

Submissions of respondent: 25 August 1999

Date of judgment: 24 December 1999