Barlow v The Law Society of the Australian Capital Territory [No 2] [2013] ACTSC 82

Supreme Court of the ACT|2013-05-15|Before: Marshall JJ, Refshauge J

1. Each party bear her or its own costs of and incidental to the hearing on 28 November 2011 and delivery of judgment on 3 February 2012.

2. Otherwise, the appellant pay the respondent's costs.

1. On 12 April 2013, the Court dismissed the appeal brought by Ms Michaela Barlow from a decision of the Law Society of the Australian Capital Territory (the Law Society) refusing to grant her an unrestricted practising certificate: Barlow v Law Society of the Australian Capital Territory [2013] ACTSC 68.

2. In doing so, we ordered also that the parties file and serve any written submissions they may wish to make as to costs within fourteen days from the date of judgment.

The parties will be invited to make submissions as to costs. Our present inclination is that each party should bear their own costs of the earlier hearing before Refshauge J, which was aborted when it was clear the appeal could only be heard by the Full Court, as both should have been aware of the jurisdictional issue which prevented his Honour from hearing the matter. Otherwise, subject to any submissions by the parties, it seems to us that the usual rule as to costs should apply. Any submissions that the parties wish to make will be required to be in writing and filed and served. In the absence of any such submissions within that time, the foreshadowed costs orders will be made_._

4. The Law Society filed submissions. They set out, correctly, their understanding of what was proposed by us in our provisional view as to costs and supported those orders.

5. Ms Barlow also filed submissions which claimed that a number of alternative costs orders were appropriate. For reasons which follow we consider that none of those proposed orders should be made.

6. Ms Barlow initially submitted that there was a general principle that the court would make no order as to costs "unless the court considers that the making of a costs order is, in the circumstances of the particular case, fair and reasonable". The authority cited was Hunter Development Brokerage Pty Ltd v Cessnock City Council (No 2) [2006] NSWCA 292; (2006) 68 NSWLR 177. That decision was not authority for that principle as a general proposition. The words quoted came from a particular rule, r 4(2), in the Land and Environment Court Rules 1996 (NSW). No such rule appears in the Court Procedures Rules 2006 (ACT).

7. In that judgment, the New South Wales Court of Appeal set out the appropriate principles where, as in this Court, there is no such special rule. In its judgment (at 181-2; [16]-[17]), the Court said of the general rule giving an unconstrained power such as r 1721 of the Court Procedures Rules that:

[a]s was explained by Gaudron and Gummow JJ in Oshlack [(1998) [1993] HCA 11; 193 CLR 72], adapting the words of Dixon J in Water Conservation and Irrigation Commission (NSW) v Browning [1947] HCA 21; (1947) 74 CLR 492 at 505, the power is 'unconfined except in so far as "the subject matter and the scope and purpose" of the legislation may enable an appellate court to pronounce the reasons given by the primary judge to be "definitely extraneous to any objects the legislature could have had in view"': (at 81 [22]).

As identified in Latoudis v Casey [(1990) [1990] HCA 59; 170 CLR 534], the primary and generally the only relevant consideration is that the power is conferred 'to compensate the successful party against the expense to which that party has been put by reason of the legal proceedings': Oshlack (at 82 [25]); see also Ruddock v Vadarlis (2001) 115 FCR 229 at 235 [12] (Black CJ and French J).

8. This is the proper approach to the award of costs in this jurisdiction.

9. Ms Barlow then submitted there should be no order for costs. She first referred to Attorney-General (SA) v Corporation of the City of Adelaide [2013] HCA 3; (2013) 87 ALJR 289 but that decision did not address that issue at all.

10. Ms Barlow also submitted that the proceeding constituted a test case in which, she submitted, the court may make no order for costs. It may be accepted that such an order may be made where a case is a test case, as was suggested by Kirby P in Attrill v Richmond River Shire Council (1995) 38 NSWLR 545 at 556.

11. The problem with the submission, however, is that this was not a test case. A test case has been described by Hunt JA in Vriend v Alberta (1996) 141 DLR (4th) 44 at 53 as follows:

a case where the parties seek primarily to settle a point of law, and where the impact of that rule on those parties is of secondary importance to the settlement of the rule itself.

12. Accordingly, a test case is likely to benefit directly a significant number of others who are similarly affected by the same rule as described by Heydon JA in A Goninan & Co Ltd v Gill [2001] NSWCA 77; (2001) 51 NSWLR 441 at 459-60; [60].

13. There is no doubt that Ms Barlow wanted to settle her complaint about the 1994 decision of the Law Society but that is far from making the proceeding a test case. In her submissions, she seemed to articulate the issue as "whether a legal practitioner may rely on legislation to govern his or her rights to practice" but that was not an issue in the proceeding nor, it seems to us, is it controversial.

14. There is no evidence before us that other practitioners and, if so, a significant number, were in the same or similar situation to Ms Barlow in respect of the issues surrounding the 1994 decision and its consequences to which she took exception and which we have found was unjustified. Nor was there any indication that the reformulated issue in her costs submissions was a matter of current controversy.

16. Ms Barlow also submitted that the proceeding had been instituted in the public interest such that judgments such as Oshlack v Richmond River Council [1993] HCA 11; (1998) 193 CLR 72 may support her submission that there be no order as to costs. Ms Barlow initiated this proceeding for a perfectly legitimate but private and personal benefit, namely to secure to herself an unrestricted practising certificate. This was not public interest litigation in any relevant sense, whatever value our judgment may have beyond the parties.

17. Ms Barlow then submitted that the conduct of the Law Society justified the special costs order she sought. Again, there is room for such considerations in making costs orders. She referred to the well-known comment of Eve J in Ritter v Godfrey [1920] 2 KB 47. She referred to part of the relevant passage of his Lordship's judgment but not, however, the whole, which puts it into context. What his Lordship said (at 66) was:

[I]n determining whether a good ground exists for the exercise of the judicial discretion, the judge must eliminate from consideration the conduct constituting the alleged cause of action, and must then inquire whether the defendant has so conducted himself ante litem motum (1) as to induce in the plaintiff's mind the reasonable belief that there is no valid defence to the claim, or (2) has so misconducted himself as to have goaded the plaintiff into a litigation on which he would never have embarked but for such misconduct. A persistent refusal on the part of an agent or trustee to answer inquiries, to give reasonable explanations, to impart information, or to render adequate accounts might well amount to conduct sufficient to induce a reasonable belief that a claim to recover moneys from him was maintainable, and provocative conduct or even truculent language might readily be shown to have compelled proceedings by a plaintiff who otherwise would never have gone to the extreme limit of instituting an action. In such circumstances there would exist ground for the exercise of the discretion, but in my opinion there must be something more than a repudiation, and even a forcible repudiation, of liability, something more than a display of bad taste, or even bad temper, some actual misconduct on the defendant's part before a foundation is laid for the exercise of the discretion. The judge, however much he may disapprove of the defendant's behaviour, is not entitled to refuse him his costs unless he has materials upon which he is prepared to hold judicially that the defendant has thereby created a mistaken belief in the plaintiff's mind or that his misconduct was the real cause of the action being brought.

18. While we did express the view that the Law Society should have acted more compassionately in responding to the failed expectations of Ms Barlow, this cannot be regarded as in any way the kind of conduct referred to by Eve J.

19. Ms Barlow also referred to the Respondent having a discretion to issue to her an unrestricted practising certificate. That misstates the position, for the Law Society, as we noted, was bound by the legislation. As we found, Ms Barlow did not meet the relevant criteria and so the Law Society was correct in not issuing to her such a certificate.

20. She then referred to the refusal of the Law Society to mediate or negotiate as a reason for departing from the usual costs order. The courts do encourage parties to mediate or negotiate. Indeed, there is a view in England and Wales that an unreasonable refusal to do so may affect the discretion as to costs. See, for example, Halsey v Milton Keynes NHS Trust [2004] EWCA Civ 576; [2004] 4 All ER 920. There are some similar suggestions amongst Australian judges, as referred to in Ezekiel-Hart v The Law Society of the Australian Capital Territory [2012] ACTSC 135 at [26]- [36].

21. In this case, however, there was little room for mediation; Ms Barlow was either entitled to be granted an unrestricted practising certificate or she was not. We have found that the Law Society was correct; she was not. In any event, we do not have sufficient evidence of the circumstances under which any request for mediation or negotiation was made to say that it was appropriate to engage in either. Without derogating from the value and importance of mediation, we cannot find that the Law Society's suggested refusal to mediate or negotiate was unreasonable such that it was relevant to the question of costs.

22. Ms Barlow also complained that there was delay caused by the Law Society and for which she was not responsible. It is correct that her appeal was commenced in October 2010. By the time it came before the court, through the ordinary processes of the court, however, the year for which she had applied for the grant of an unrestricted practising certificate had passed. At the suggestion of the court, she made a fresh application. That appears to have been dealt with expeditiously. The appeal was then conducted as promptly as the resources of the court would permit.

23. There was a hearing before Refshauge J which should have been before the Full Court. Neither party drew his Honour's attention to that matter. While the Law Society should have been well aware of it, Ms Barlow's submissions show she was also aware of it. She states that she is "an inexperienced litigator". That may be accepted, but she was, in the appeal, putting herself forward as a person who "has attained such a level of professional skill, and gained such experience, that it is appropriate that an unrestricted practising certificate be issued to [her]" under Item 5 in Table 10, attached to s 10 of the Legal Profession Regulation 2007 (ACT). That does require her to show she can make herself familiar with relevant legislation and the issues to be confronted in any legal task which she undertakes.

24. In our view, Ms Barlow bears a responsibility for this situation as well as the Law Society, though, of course, the Law Society should have been aware of the position. We are not satisfied that any "missed timeframes" were such that the ordinary rule as to costs should be disturbed.

25. There is no basis disclosed for the court making no order as to costs.

26. Ms Barlow went further and submitted that the Law Society should pay her costs. Again, in appropriate circumstances, such an order has been made. As Sachs LJ said in Knight v Clifton [1971] Ch 700 at 718, however, it would require a strong or exceptional case to justify such an order.

27. The only matters put forward by Ms Barlow are matters on which we have found against her: that the Law Society could have issued her with an unrestricted practising certificate, that the change in approach was an arbitrary decision of the Law Society about the value of the Legal Workshop Course. She referred to other matters, none of which justify such a radical departure from the established approach to the exercise of the discretion to make costs orders.

28. Finally, Ms Barlow submitted that there should be no order for costs made pending any appeal she may institute. She set out what she submitted were errors made in our decision.

29. Whether they are or not is not a matter for this Court. It is appropriate that this matter be concluded with an order for costs. An appeal court can, if it considers there are grounds to do so, stay any such order pending the appeal. That, however, does not justify us from refraining from making such an order. Indeed, we are bound to do so.

30. In our view, Ms Barlow has not advanced any argument that would justify us departing from the provisional views we expressed in our judgment. The Law Society has succeeded and is entitled to be compensated for the expense to which it has been put by reason of the legal proceeding, save for those of the hearing before

31. Accordingly, it is appropriate to make the foreshadowed orders and we will do so.

I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Date of hearing: Written submissions of the Law Society received

Procedures Rules 2006

Environment Court Rules 1996

Profession Regulation 2007

Procedures Rules 2006

Environment Court Rules 1996

Profession Regulation 2007

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