Al-Mozany v Dental Council of New South Wales

Applicable principles to the determination of this costs application

1. The relevant principles were summarised succinctly by Meagher JA in the NSW Court of Appeal in Qasim v HCCC [2015] NSWCA 282 (McColl and Ward JJA agreeing). At [84] his Honour said: "84 Clause 13 in Sch 5D of the applicable National Law relevantly provided: (1) A Tribunal may order the complainant (if any), the registered health practitioner or student concerned, or any other person entitled to appear (whether as of right or because leave to appear has been granted) at an inquiry or appeal before the Tribunal to pay costs to another person as decided by the Tribunal. 85 In Lucire v Health Care Complaints Commission (No 2) [2011] NSWCA 182 at [46] - [48] this court (Basten JA, McColl JA and Sackville AJA agreeing), following Ohn v Walton (1995) 36 NSWLR 77, held that a power in substantially the same terms was to be exercised for the purpose of indemnifying or compensating the person in whose favour a costs order was to be made, and not for the purpose of punishing the person against whom it is made. That being so, ordinarily costs should follow the event unless there are reasons to conclude otherwise. Lucire was followed in Health Care Complaints Commission v Philipiah [2013] NSWCA 342 at [42]. (This position is in contrast to that under s 60 of the CAT Act which provides by subs (1) that each party to proceedings in the Tribunal is to pay its own costs and that the Tribunal may award costs in relation to proceedings 'only if it is satisfied that there are special circumstances warranting an award of costs'.)"
2. In Health Care Complaints Commission v Philipiah [2013] NSWCA 342 at [42] - [44], Emmett JA (Meagher JA and Beech-Jones J agreeing) in the NSW Court of Appeal expanded on the relevant principles in the following manner: "42 As a general rule, costs of proceedings before the Tribunal should follow the event and mere impecuniosity is not a justifiable reason for departing from that rule. However, there are factors that might militate against the recovery by the Commission of all of its costs in particular proceedings. For example, one factor might be that the Commission failed to obtain findings of professional misconduct alleged, even though it obtained findings of unsatisfactory professional conduct. Another factor might be that the Commission failed to establish all of the particulars of professional misconduct alleged. Where discrete elements of the conduct complained of are not established, that may be relevant. A third factor might be oppressive conduct by the Commission in the way in which it prosecuted the proceedings before the Tribunal, such as taking procedural steps that gave rise to unnecessary expense in preparing for the hearing (see Lucire v Health Care Complaints Commission (No 2) [2011] NSWCA 182 at [48] - [52]). It has not been suggested by the Doctor that any of those factors applied. 43 As the Tribunal observed in its reasons, the question of costs is discretionary. However, the discretion is a judicial one and must be exercised according to proper fixed principles and rules of reason and justice, not according to private opinion. While it is not easy to state the precise principles that are to guide a court in exercising the discretion over costs, the discretion is only to be exercised where there are materials upon which to exercise it (Williams v Lewer (1974) 2 NSWLR 91 at 95). 44 It is important when exercising the discretion to bear in mind that costs are intended to compensate a successful party. Costs are not intended to penalise an unsuccessful party. It is not an appropriate basis for the exercise of the discretion that an order for costs may cause hardship to the party against whom the order is made."

Conclusion as to the making of a costs order

1. The respondent was totally successful in these proceedings. As I have previously indicated, the substantive proceedings were dismissed for want of prosecution.
2. Prima facie, therefore, in compliance with the principles set out above, the respondent is entitled to a costs order in its favour.
3. The respondent submitted that there were no factors which would militate against the making of a favourable costs order. In its submissions, the respondent pointed out that it had complied with all of the directions and orders made by the Tribunal in and in connection with the preparation of the substantive proceedings for hearing, in the conduct of the hearing that occurred and in pursuing the appellant to facilitate the disposition of the appeal. I agree with these submissions.
4. In all the circumstances it is appropriate to make a costs order in favour of the respondent.

The quantum of costs

1. Clause 13 of Schedule 5D provides the: …. Tribunal may fix the amount of costs itself or order that the amount of costs be assessed by a costs assessor under the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis.
2. The respondent asked that I fix the quantum of costs. In doing so it provided a schedule of costs including: 1. Solicitors' fees of $18,631.80 2. Disbursements consisting of printing expenses and transcript $6692.81 3. Counsel's fees of $46,739.44 4. The fees of an expert orthodontist $59,978.99
3. The above amounts total $132,043.04. The respondent said that it would accept a discount of 30% of all these costs, leading to a reduced claim of $92,430.13.
4. Whilst the amount claimed for costs might appear to be excessive, a brief explanation of some of the matters which caused these proceedings to be unduly prolonged is set out in the following extracts from the substantive decision at [8] - [9], [39], [42] and [50] - [51]: "8 The appeal proceedings came on for hearing on 12, 13 and 14 February 2020. The appellant was represented by Mr K Connor SC of counsel instructed by Mr N Birbas solicitor. The respondent was represented by Ms A Horvath of counsel instructed by Ms W Aziza solicitor. The Tribunal was constituted by me as the Presiding Member, Drs P Hanrahan and K Campbell as Professional Members and S Lovrovich as General Member. When the proceedings commenced, they concerned six patients who had been treated by the appellant. During the course of the hearing the Tribunal raised concerns about the treatment afforded by the appellant to another three patients. Information concerning these patients had been made available to the Tribunal for the purpose of the appeal proceedings. The proceedings would not have concluded within the period for which they had been set down and would have had to be adjourned in any event. Dr A M Cordato had provided expert opinion on behalf of the respondent. The appellant relied upon an expert opinion of Dr E Kosy. 9 The proceedings were adjourned to enable additional supplementary expert evidence to be filed with respect to the three additional patients. The appellant indicated through his counsel that he would be able to serve a further statement with respect to these three patients within a period of two weeks. The matter was listed for further hearing on 16 and 17 April 2020. ….. 39 The Tribunal has fixed further hearing dates on a number of occasions which have had to be vacated because of the appellant's failure to ensure that he was ready to proceed. In addition, the Tribunal's attempts to fix further hearing dates on a number of occasions have been frustrated by the appellant's failure to ensure that he was ready to proceed. During all of this period the respondent has been willing, ready and able to participate in the further hearing of the proceedings and has endeavoured to facilitate this occurring. ….. 42 The proceedings were adjourned in February 2020 to allow both parties to adduce expert evidence with respect to the circumstances of the three additional patients which are of concern to the Tribunal. The respondent attended to this matter expeditiously. Unfortunately, although the appellant produced an unsigned, undated and un-authored report on 27 May 2021 the respondent has substantially been in default throughout the whole of this fifteen months' period. …. 50 As I explained to the appellant during the course of the hearing on 22 July 2021, and as he readily acknowledged, some of the difficulties which have arisen have been created by his failure to respond to the respondent's communications either in a timely manner, or at all. This behaviour detracts from any confidence that the appellant will be able to manage the necessary steps to bring these proceedings to a conclusion. 51 The Tribunal has endeavoured on several occasions over a long period of time to fix dates for the adjourned hearing. There have been lengthy and significant failures by the appellant to pursue the necessary steps to enable the adjourned hearing to take place which I have set out in detail above. These delays, coupled with the fact that the proceedings are still not ready to be set down for an adjourned hearing and my lack of confidence in the appellant that he will be able to achieve this state of readiness are all powerful factors which militate towards a dismissal of the proceedings for want of prosecution. These factors outweigh, on balance, the adverse impact upon the appellant in precluding him from prosecuting this appeal. I conclude that the appeal must be dismissed accordingly."
5. In support of its submissions that I fix the quantum of costs, the respondent relied on the following matters: 1. the many failures by the appellant to comply with directions led to significant delays and the incurring of increased costs by reason of the many directions hearings which were conducted, the vacation of hearing dates and the number of interlocutory applications which had to be dealt with. 2. the costs which were being sought were proportionate and reasonable in all the circumstances, particularly as the preparation of the respondent's case had been confined to the issues raised by the appellant. 3. the proceedings involved complex matters specific to the profession of orthodontics, requiring the retention of an expert who provided three reports. Each report was necessary and was complex because the expert was required to review 13 folders of materials and documents and to review a number of orthodontic clinical records such as radiology reports which were contained in electronic form only.
6. Overall, the respondent submitted that by fixing an appropriate quantum of costs it would avoid the likely protracted and expensive assessment processes involved in the consideration of a large volume of material.
7. His Honour Cowdroy OAM QC ADCJ, constituting the Appeal Panel of this Tribunal, considered the desirability and appropriateness of making a fixed sum costs order in 203 Castlereagh Street Pty Limited v Skybloo Holdings Pty Limited [2017] NSWCATAP 29 at [39] - [53]: 39 The principles concerning when a Court might make a gross sum costs order are set out in a number of recent Court of Appeal decisions, including: Hamod v State of New South Wales [2011] NSWCA 375 at [813] ff; eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd (No 2) [2015] NSWCA 422 at [8] ff and [30]; and Kostov v Zhang (No 2) [2016] NSWCA 279 at [19] ff. 40 These principles, relevantly adapted to the circumstances of the Tribunal, include: (1) A fixed sum costs order involves a departure from the usual process by which costs are assessed in accordance with the statutory procedures now relevantly found in the Legal Profession Uniform Law Application Act 2014 (NSW) (especially Pt 7 dealing with "ordered costs") and the Legal Profession Uniform Law (NSW), eInduct Systems at [8]; (2) A fixed sum costs order may be appropriate where: (a) the sum of costs in question is relatively modest, eInduct Systems at [30]; (b) a party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment, Hamod at [813], [816] and [817], eInduct Systems at [30]; (c) the assessment of costs would be protracted and expensive, Hamod at [813] and [817]; and/or (d) the case was complex, Hamod at [815]-[817]; (3) Sections 36(1) and (4) of the NCAT Act (which can be seen as equivalent to those in ss 56(1), 57(1)(d) and 60 of the CP Act) suggest that the following factors merit particular consideration: (a) the relative responsibility of the parties for the costs incurred; (b) the degree of any disproportion between the issue litigated and the costs claimed; (c) the complexity of the proceedings in relation to their cost; and (d) the capacity of the unsuccessful party to satisfy any costs liabiltity, Hamod at [816], Kostov at [22]. (4) An order for fixed sum costs should be based on an informed assessment of the actual costs, having regard to the information before the Tribunal. Furthermore, the approach taken to estimate the costs must be logical, fair and reasonable. This may involve an impressionistic discount of the costs actually incurred in order to take into account the contingencies that would be relevant in any formal costs assessment, Hamod at [820]; (5) The power to make a fixed sum costs order should only be exercised when the Tribunal considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available, Hamod at [813], Kostov at [23]; 41 Examples of the type of material that should be available if a fixed sum costs order is to be made can be found in the decisions in Colquhoun v District Court of New South Wales (No 2) [2015] NSWCA 54 at [7] and SAB Closed 1 Pty Ltd v Bees & Honey Pty Ltd; Bees & Honey Pty Ltd v SAB Closed 1 Pty Ltd [2015] NSWSC 1162 at [10]. The types of supporting material usually required include: (1) the timing and nature of costs incurred, including details of the work done, the hours worked, the hourly rates actually charged and, in the case of counsel's fees, similar details concerning the work done by counsel; (2) the rates at which counsel, other lawyers and other professional advocates, if relevant, charge; and (3) the amount likely to be recoverable on assessment in the event that that took place, which may be established by "objective arm's length evidence from a costs assessor" (to use the language of Stevenson J in SAB Closed 1 at [10]. 42 Some decisions of the former ADT should also be considered. In B & L Linings Pty Ltd v Chief Commissioner of State Revenue (No 6) (RD) [2012] NSWADTAP 26, the Appeal Panel of the ADT decided in a retail lease matter that the appropriate course was to order that costs be as agreed or assessed and not to make a fixed sum costs order. Nonetheless, at [115] the Appeal Panel said: 'Our view on assessment by the Tribunal is as follows. We recognise that the Tribunal may and in practice does determine the amounts payable pursuant to costs orders made under section 88 of the ADT Act. But it only takes this step when the determination is comparatively simple. In proceedings that have been as lengthy and as complex as these proceedings, it does not purport to have the necessary expertise.' 43 This approach is consistent with the approach referred to by the Court of Appeal in eInduct Systems at [30], mentioned above. As to other aspects of the decision in B & L Linings, I would reserve those questions for proceedings in which it is necessary to decide them. Accordingly, my decision should not be taken as adopting all of the views expressed by the Appeal Panel of the ADT in that decision. 44 In Fathullah v Varma (RLD) [2013] NSWADTAP 39 at [148], the Appeal Panel of the ADT held: 'The present proceedings, in our opinion, are akin to those described by the Appeal Panel at paragraph [115] [of B & L Linings]. As Mr Soltan submitted, a costs order stipulating a fixed amount is preferable to an order for the payment of costs 'as agreed or assessed'. As he pointed out, the Appeal Panel, hearing an appeal from the Retail Leases Division, said this in Trowbridge v Morris (RLD) [2010] NSWADTAP 70 at [33]:- "33 We would encourage Tribunal members to make fixed sum costs orders in cases where neither party is legally represented as is the case here. We think that orders using the 'as agreed or assessed' formula are best confined to cases with lawyers on both sides."' 45 In the light of the principles set out above, I do not think this statement on fixed sum costs, if it is intended to be generally applicable, is correct. Tribunal Members should not generally be encouraged to carry out the work of costs assessors by making fixed sum costs orders. The circumstances most likely to arise in the Tribunal where it might be appropriate for the Tribunal itself to assess costs will usually be where the costs are very modest and the assessment is simple. This might be the case, for example, where the parties are self-represented and not entitled to recover work done in preparing their case, and the only recoverable costs are the filing fee and other small, non-contentious out of pocket expenses, see generally: Gino Dal Pont, Law of Costs (3rd ed, 2013) at 171-174. 46 Finally, in my view there are no sufficient reasons why orders using the "as agreed or assessed" formula should be confined to cases with lawyers on both sides. It is not appropriate for the Tribunal to apply such a general rule. 47 The present appeal is not one in which it can be said that the costs claimed are small or modest, especially in the context of the type of matters that usually come before the Tribunal. There is no suggestion that Skybloo would not be able to meet a liability of the order likely to result from the assessment of any ordered costs. Nor is it likely that the assessment of costs in a matter such as the present would be protracted and expensive. The appeal was not particularly complex. 48 The just, quick and cheap resolution of the real issues in these proceedings does not require me to make a fixed sum costs order rather than ordering that the costs be as agreed or assessed. Similarly, the obligation in s 36(4) to implement the practice and procedure of the Tribunal in such a way as to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings does not require or support the making of a fixed sum costs order. The "real issues" in the context of guiding principles in s 36(1) and the "subject matter of the proceedings" in s 36(4) should not be taken to refer to the question of costs, see: eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd (No 2) [2015] NSWCA 422 at [3]. 49 Considerations based upon s 36(1) and (4) of the NCAT Act may support the making of a fixed sum costs order as explained above. In the present appeal, however, the relative responsibility of the parties for the costs incurred does not weigh heavily either way. There is no obvious disproportion between the issue litigated and the costs claimed. The proceedings were not particularly complex in relation to their costs. As has already been noted, Skybloo has not been shown to lack capacity to satisfy any costs liability. 50 Consequently, ss 36(1) and (4) do not, in the present appeal, require or support the making of a fixed sum costs order, as sought by Castlereagh. 51 I also bear in mind that the power to make a fixed sum costs order should only be exercised if I can do so fairly between the parties. On the material presently before me and in the light of the specific submissions made by Skybloo as to the inadequacy of that material, I do not have sufficient confidence that I could arrive at an appropriate sum that would be fair to both parties. 52 In addition, assuming that costs awarded in favour of Castlereagh would include the amounts charged in respect of Mr Soltan's work (which I am not called upon to decide in this matter), I am unable to assess with confidence what charges would be 'a fair and reasonable amount of costs for [his] work' (to use the expression found in s 76 of the Legal Profession Uniform Law Application Act) from the materials before me. It is not obvious to me that the hourly rates charged by a senior associate or another solicitor in a solicitor's firm provide an appropriate comparator or basis upon which to assess the fairness and reasonableness of the rates charged for work done by a non-lawyer advocate. I am also not confident as to how the training, experience, qualifications, insurance position and professional and ethical duties of an advocate such as Mr Soltan compare with those of a senior associate or any other lawyer or non-lawyer advocate. Nor am I confident as to the impact this should have on any assessment of fair and reasonable hourly rates for Mr Soltan's work. These matters are appropriately left to a costs assessor, in a matter such as the present. 53 For all of these reasons, I am not prepared to make a fixed sum costs order involving, as it would, a departure from the usual process by which costs are assessed in accordance with the statutory procedures now relevantly found in the legal costs legislation (as defined in s 3A of the Legal Profession Uniform Law Application Act)."
8. I gratefully adopt the exposition of the relevant principles to be applied set out by his Honour above.
9. In considering the approach which I shall take to the assessment of costs, and the fixing of a lump sum in this regard, I shall take into account detailed information given to me by the respondent's solicitor, to which I shall shortly refer. In determining what are "acceptable limits" for the proper assessment of costs, I take into account experience which I have gained as a Principal Member of this Tribunal, and previously as a judicial officer since 1993, where I have been exposed to many matters in which the quantum of costs has been an issue. I am also cognisant of the need to avoid the protracted and expensive assessment of costs process. Overall, because of the intimate involvement which I have had with the substantive proceedings over a long period of time, I am prepared to conclude that the resolution of this matter may be approached as an exception to the general rule referred to in [45] of the extract from 203 Castlereagh Street Pty Limited above.
10. In support of the submission that I fix the amount of the costs, the respondent's solicitor filed an affidavit to which she annexed each invoice submitted by Ms A Horvath of counsel. These documents reveal a charge out rate varying between $440 an hour and $500 an hour together with GST. They itemise the work performed on each occasion. I am satisfied, because of my close knowledge of the steps taken by the respondent in connection with preparation for the substantive proceedings, that the work performed by counsel was appropriate, and furthermore that the range of charges made by her are within acceptable limits for the proper assessment of costs.
11. The respondent's solicitor also provided details of the professional costs charged in connection with the work performed in connection with the substantive proceedings. They show a charge out rate in the main of $334.20 per hour, some at $164.40 per hour (referable to work performed by a paralegal) and on four occasions at $410.60 per hour referable to a more senior solicitor. For the reasons advanced in [22] above, I am satisfied that the work performed by the solicitors was appropriate and that the range of charges made by them are within acceptable limits for the proper assessment of costs.
12. The respondent's solicitor provided details of the professional costs charged by Dr Mark Cordato, orthodontist, in providing expert reports concerning 10 patients of the appellant. He has charged his work out at $500 per hour together with GST. On some occasions, Dr Cordato reduced his charges by reference to the time taken to perform his work. I am satisfied that the work undertaken by Dr Cordato was appropriate as to its nature and the time taken to deal with the matters as described by him in his several invoices. I am also satisfied that the charges made by him are in an acceptable amount for the proper assessment of costs.
13. Finally, I am satisfied from perusal of seven invoices from LawinOrder that the amounts charged for copying, printing and collating of documents together with the cost of transcript of $3778.34, making a total of $6692.81, are amounts which are properly chargeable by way of disbursements incurred by the respondent in the substantive proceedings.
14. In the aggregate, all of the amounts to which I have referred total $132,043.04. Taking into account that the respondent is prepared to discount that amount by 30%, I am satisfied that it is appropriate in all the circumstances to fix a lump sum for the respondent's costs of $92,430.13. The discount of 30% will provide an adequate buffer against any concern that any of the amounts charged were excessive in any manner.

Orders

1. The appellant is to pay the costs of the respondent fixed in the amount of $92,430.13.

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 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 December 2021