Beling v Victorian Legal Services Commissioner [2021] VSCA 257

COSTS - Whether Court erred in granting respondent's costs - Whether costs should have followed the event.

1 The applicant ('Beling' or 'the applicant') commenced two proceedings in the Supreme Court arising from an investigation into his professional conduct as a legal practitioner undertaken by the respondent, the Victorian Legal Services Commissioner ('the Commissioner'). The background circumstances are more fully set out in the reasons for judgment given in appeal number S EAPCI 2021 0076 ('the first appeal'), which concerns two decisions of Judge Cosgrave, and two decisions of Judge Ryan. They need not be repeated.

2 On 17 November 2014, during the course of the investigation, Beling commenced a proceeding in the Supreme Court against the Commissioner seeking judicial review of aspects of the investigation ('the first Supreme Court proceeding'). The Commissioner sought summary dismissal of the proceeding. Beling sought leave to discontinue the proceeding. On 22 April 2016, Derham AsJ dismissed the proceeding and ordered that Beling pay the Commissioner's costs.[1] Early in his reasons, the Associate Justice observed that it was 'clear therefore that the proceeding must come to an end. The question is on whose application and on what terms?'[2]

3 Arising from the first Supreme Court proceeding, the applicant sought leave to appeal the decision of Derham AsJ made on 22 April 2016. That application was sought to be made some four years out of time.

4 In the meantime, on 23 December 2014, the Commissioner decided under s 4.4.13 of the Legal Profession Act 2004 that she was satisfied there was a reasonable likelihood that Beling would be found guilty of professional misconduct. As a consequence, the Commissioner was obliged to apply to the Victorian Civil and Administrative Tribunal ('VCAT' or 'Tribunal') for an order in relation to Beling. The proceeding against Beling in VCAT comprised two charges of professional misconduct at common law, and two charges of statutory professional misconduct. The charges were heard on various dates before Senior Member Smithers between November 2016 and 8 May 2017. On 12 July 2017, Senior Member Smithers found Beling guilty of one charge of professional misconduct at common law (charge 1). On another charge (charge 3), the Senior Member found Beling not guilty of statutory professional misconduct, but guilty of unsatisfactory professional conduct under s 4.4.20 of the Legal Profession Act 2004. The other two charges were dismissed.[3] The Senior Member then adjourned the proceeding to determine the orders which would be made in light of those findings.

5 In his second proceeding in the Supreme Court[4] ('the second Supreme Court proceeding'), Beling sought leave to appeal the VCAT decisions made on 12 July and 27 September 2017. His application was out of time, and he required an extension of time in which to bring the application. On 22 April 2020, Judicial Registrar Keith refused an application by Beling for an extension of time within which to seek leave to appeal the VCAT decisions and ordered Beling to pay costs.[5]

6 The application by Beling to seek leave to appeal against the decision of Associate Justice Derham in the first Supreme Court proceeding, and the application by Beling to seek leave to appeal against the decision of Judicial Registrar Keith in the second Supreme Court proceeding, came before Ginnane J of the Trial Division. At the commencement of the hearing of those applications, Beling sought to make three interlocutory applications. By those applications he sought leave:

(a) To join VCAT as the second defendant in each proceeding.

(a) To serve interrogatories directed to VCAT in the second Supreme Court proceeding.

(b) To file and serve a notice to admit on VCAT in the second Supreme Court proceeding.

7 On 1 July 2021, Ginnane J delivered judgment. His Honour refused Beling leave to join VCAT as a party to the proceedings, and refused leave to Beling to serve interrogatories and a notice to admit on VCAT. Ginnane J granted leave to Beling to rely on the notice of appeal from the decision of Judicial Registrar Keith in the second Supreme Court proceeding. His Honour did not grant leave to Beling to rely on two amended notices of appeal from Associate Justice Derham or from VCAT.[6]

8 Subsequently, by a further ruling, Ginnane J ordered that Beling pay the costs of the applications.[7] The two decisions of Ginnane J, and the orders made by his Honour, are the subject of the present application for leave to appeal.

9 The judge noted that, as interrogatories[8] and a notice to admit[9] may only be served on a party to a proceeding, an application to serve either of those interlocutory processes on VCAT could only succeed if VCAT were first joined as a party to either or both of the proceedings.[10] For that reason, he first considered whether an order joining VCAT should be made.

10 The judge concluded that there was no case for VCAT to be joined as a party to the application for leave to appeal the first Supreme Court proceeding as VCAT had played no part in it. He observed that the application to appeal the orders of the Associate Justice had nothing to do with VCAT.

11 The judge also concluded there was no case for VCAT to be joined as a party to the second Supreme Court proceeding, being an application for an extension of time to seek leave to appeal on questions of law from VCAT's orders determining the Commissioner's disciplinary charges against him. Ginnane J said that '[u]nder s 148 of the Victorian Civil and Administrative Tribunal Act 1998 ('VCAT Act'), the questions of law have to concern, or arise from, the orders of the Tribunal.'[11] The Tribunal was not joined as a party to such applications for leave to appeal.

12 The judge also noted that Beling had not sought to join VCAT as a party to his application for an extension of time that had been refused by the Judicial Registrar. In that respect, the judge recorded Beling's stated reason for not joining VCAT at that earlier time as being that Beling considered that it might be counterproductive to his interests because of the relationship between judicial officers.

13 The application for the joinder of VCAT in each matter was refused. That meant that the applications to serve interrogatories and a notice to admit could not succeed. In any event, the judge noted that as their subject matter had no relevant connection with any issue that could arise in the proceeding, they were 'entirely an exercise in fishing',[12] seeking to pursue unsubstantiated claims which were not relevant. The judge concluded that they raised allegations of impropriety without any justifiable basis.

14 The judge next considered Beling's application to serve interrogatories on the Commissioner in the first Supreme Court proceeding. The judge noted that it was not clear whether in fact Beling sought leave to serve the interrogatories, but that if leave had been sought, it would have been refused on the basis that, first, they were fishing and based on allegations of impropriety for which no basis was provided. Secondly, they had no relevant connection to the issues in the proceedings.

15 The judge granted leave to Beling to rely on a notice of appeal dated 18 January 2021 in the second Supreme Court proceeding. He refused Beling leave to rely on two amended notices of appeal dated 18 January 2021 from the decision of the Associate Justice and from the decision of VCAT, as the proposed amendments contained allegations of impropriety without any supporting evidence. Moreover, the allegations contained in the proposed amendments possessed no connection to any issue relating to Beling's appeals or applications for leave to appeal.

16 The applicant relies on seven proposed grounds. The first six proposed grounds relate to the interlocutory decisions of 1 July 2021, and the seventh ground concerns the costs order made against the applicant. Under grounds 1 to 6, the applicant contends that the judge erred in failing to consider, or sufficiently consider, the evidence and submissions in favour of:

(a) joining VCAT to both proceedings;[13]

(b) permitting the applicant to serve a notice to admit on VCAT;[14]

(c) permitting the applicant to serve interrogatories on VCAT;[15]

(d) permitting the applicant to serve interrogatories on the Commissioner;[16]

(e) allowing the applicant to amend his Notice of Appeal in the second Supreme Court proceeding;[17] and

(f) allowing the applicant to amend his Notice of Appeal in the first Supreme Court proceeding.[18]

17 Before turning to the grounds, it is appropriate to make some general observations. As is more fully explained in our reasons given in the first appeal, the investigation under the Legal Profession Act 2004 and the subsequent proceeding in VCAT, concerned the conduct of the applicant in acting for a husband and wife in proceedings against a bank. A significant issue was the amount of costs charged by the applicant in acting for the couple.

18 As part of its investigation and in the proceeding in VCAT, the Commissioner relied on the file kept by the applicant and which was obtained by the Commissioner. The applicant says that the Commissioner and her staff doctored the file by removing some 20 documents that he said related to his acting for the couple and were relevant to the allegations. He says that he became aware in January 2017 that the file had been doctored and he made allegations against the Commissioner and her staff. Those allegations were considered, and rejected by VCAT.

19 The applicant also says that VCAT was complicit in the removal of the documents. He later said that he did not raise this allegation in VCAT because it would not suit him forensically to do so. Subsequently, he has alleged serious impropriety on the part of the Associate Justice related to the proceeding and the file.

20 Two points must be made clearly. First, at no stage has the applicant supported his grave allegations of fraud, misconduct, collusion, and impropriety by evidence or cogent material. The allegations have never risen higher than assertion. Second, the applicant has repeatedly said that the respondent has admitted the wrongdoing. Such admissions were said to arise from the failure of the respondent to deny the allegations on oath and because the respondent consented to the applicant filing an amended notice of appeal from the Associate Justice and from VCAT. Although we deal with this more fully when we turn to proposed grounds 5 and 6, it can be stated at once that the failure to deny the allegations on oath does not constitute an admission. Further, consent to a party filing an amended pleading does not in any way amount to an admission as to the truth of the allegations contained in the pleading.

21 It follows that the applicant's grave allegations of wrongdoing remain entirely unsupported. They should not have been made.

22 It is convenient to deal first with grounds 1 to 3. As will appear, grounds 2 and 3, which concern the judge's refusal to allow the service of interrogatories and a notice to admit on VCAT, only arise if VCAT was made a party to the proceedings, which is the subject of ground 1.

23 The applicant's submissions on ground 1, in common with all of his submissions, are prolix and difficult to follow. As already noted, at the heart of the applicant's submissions is an allegation that the VCAT files have been doctored, either by the Commissioner or VCAT. Presumably, he wants to interrogate VCAT, or alternatively serve on it a notice to admit to establish this fact.

Is VCAT a proper or necessary party to either proceeding?

24 The first point to note is that the decisions of the judge were on matters of practice and procedure. This Court must exercise particular restraint in reviewing decisions of that kind. Before the Court will intervene, there must be a material error in principle, and the decision appealed from must work a substantial injustice to one of the parties. The question of injustice flowing from the order appealed from will generally be a relevant and necessary consideration.

25 Dealing first with the first Supreme Court proceeding and the application for an extension of time to appeal the decision of the Associate Justice, the proceeding was a judicial review proceeding arising in the context of an examination by the Commissioner into the conduct of the applicant, a legal practitioner under the Legal Profession Act 2004. At the time the proceeding was commenced, that process had not come to a conclusion. Having read the originating motion and the reasons for judgment of Associate Justice Derham, it is sufficient to note that the proceeding entailed an attempt to interrupt the processes that the Commissioner was undertaking under the Legal Profession Act 2004.[19] Given that the proceeding was one of judicial review, it could only concern the lawfulness, rather than the merits, of the conduct of the Commissioner in relation to the investigation.

26 When the proceeding commenced, VCAT had no role to play in the investigation, its jurisdiction had not been invoked and there was nothing for it to do. It had not made any decision that could have been the subject of judicial review, nor did the proceeding concern any threatened exercise of power by VCAT that could be enjoined.

27 At the time the Associate Justice heard the application, a matter had been commenced in VCAT, however both parties wanted the proceeding to come to an end and there was no reason to join VCAT. The applicant submitted in this Court, that he subsequently became aware of what he alleges was wrongdoing by VCAT. However, that does not justify joining VCAT to the appeal from the Associate Justice. Put simply, VCAT is irrelevant to the matters raised in the first Supreme Court proceeding which concerned the investigation by the Commissioner. And there is no foundation in the material, beyond assertion, for the allegations he makes against VCAT. There was no error by Ginnane J in his conclusion that there was no basis to join VCAT in respect of the application for leave to appeal the decision in the first Supreme Court proceeding.

28 As already noted, the second Supreme Court proceeding in the Trial Division was an application for an extension of time to seek leave to appeal under s 148 of the VCAT Act. Section 148 provides for an appeal on a question of law from a decision of VCAT. Sub-section 148(2) provides that an application for leave to appeal must be made in accordance with the rules of the Supreme Court. Sub-section 148(7) provides, in familiar terms, for the orders that can be made on an appeal to include affirming, varying or setting aside the order of the Tribunal, making any order that the Tribunal could have made, or remitting the proceeding to the Tribunal.

29 Order 4 of the Supreme Court (Miscellaneous Civil Proceedings) Rules 2018 regulates an appeal from VCAT under s 148 of the VCAT Act. It does not mandate who are to be the parties to an appeal.

30 In the case of a statutory appeal from a tribunal, the starting point will be the parties below. In that context, ss 59 and 60 of the VCAT Act provide for the parties in VCAT. In no sense was VCAT a party in the proceeding before itself.

31 In an appeal under s 148, VCAT is not affected by the orders that the Court may make in such an appeal. It has no interest in the outcome that would justify or require it being a party. No orders are sought against it. All of the relief that can be made under s 148, assuming success in an appeal, can be made without joining VCAT. There was no basis to regard VCAT as a proper party to the appeal. The judge was correct to refuse to make an order joining it to the proceeding.

32 Ground 1 has no prospects of success and leave to appeal on that ground must be refused.

33 As the judge correctly observed, interrogatories and a notice to admit can only be served on a party. Since VCAT is not a party, and, correctly, no order for its joinder was made, there is no basis to permit the service of interrogatories or a notice to admit. Leave to appeal on grounds 2 and 3 must be refused. The applicant's submission that a notice to admit or interrogatories can be served on a non-party by reference to ord 63 must be rejected. The purpose of both a notice to admit and an interrogatory, is to obtain information from a party. There are other distinct mechanisms, with their own prescriptions and limitations, for obtaining information from a non-party.

34 As already observed, this ground concerns the decision of the judge to refuse leave to serve interrogatories on the Commissioner in the first Supreme Court proceeding, and perhaps, although it is far from clear, in the second Supreme Court proceeding.

35 In his written submissions Beling adopts the following summary, by Ginnane J, of what he seeks from interrogatories

They seek information about the persons who worked in the Commissioner's office during the disciplinary investigation, why the Commissioner's notice of decision did not analyse or decide various matters, the state of knowledge of a staff member about whether the Commissioner had obtained the former client's waiver of legal privilege to use his client file in the investigation, why two responses from the Commissioner did not analyse or decide Mr Beling's complaints about particular matters, whether particular allegations made by the Commissioner in the disciplinary investigation complied with professional standards in the legal profession, and the recollections of named persons about statements made by counsel and by the Associate Justice during a Supreme Court hearing in 2015.[20]

36 He submits that they will help him prove that the VCAT file was 'forged and falsified' and are not a mere fishing expedition.

37 This ground must be rejected. First, the applicant has not shown any error on the part of the judge. It is insufficient for him to simply restate his arguments, rather he must show that the judge committed some error of principle or other error of a kind that would justify appellate intervention.

38 Second, the first Supreme Court proceeding was terminated on the basis of summary judgment on the application of the Commissioner. At the same time, the applicant had sought to discontinue the proceeding. In those circumstances, there was simply no occasion to obtain further evidence by way of interrogatories or otherwise.

39 To the extent, that Beling sought leave to serve interrogatories in the second Supreme Court proceeding, his position was even weaker. Again no error has been shown. Even assuming that interrogatories might conceivably be permitted in an appeal on a question of law from VCAT, though it is very difficult to identify the circumstances that would justify such a course, there was in this case no justification for them.

40 Third, the applicant's submission in this Court does not show that there was any legitimate forensic purpose for the interrogatories. The judge's conclusions that they were fishing and were based on allegations of impropriety for which no basis was provided is correct.

41 Fourth, we are not satisfied that leave to serve interrogatories on the Commissioner was sought by Beling, and therefore there was no error in not granting leave to serve them. Such an order was not contained in his summons.

42 The applicant submits that in refusing leave to rely on two amended notices of appeal dated 18 January 2021 in each proceeding, the judge failed to consider the evidence and submissions of the applicant.

44 These grounds are concerned with the judge's decision to refuse leave to amend the notices. The applicant sought to rely on three proposed amended documents:

(a) a proposed notice of appeal from the Associate Justice dated 18 January 2021;

(b) a proposed notice of appeal from VCAT dated 18 January 2021; and

(c) a proposed notice of appeal from the Judicial Registrar dated 18 January 2021.

45 The judge gave leave in respect of the third document but refused leave in respect of the first two.

46 By email dated 18 January 2021, the respondent consented to the applicant relying on the proposed amended documents. In that email, the solicitors for the respondent wrote:

Notwithstanding that my client considers that the proposed amendments to the notices of appeal are unnecessary and in relation to the appeals against the decisions of Associate Justice Derham and Judicial Registrar Keith of 22 April 2020, are wholly without merit, in order to ensure that there is no delay in the current timetable, my client will consent to the proposed amendments. Please file and serve the documents within the next 7 days.

Otherwise, I advise that any application to join VCAT as a party will be opposed.

47 The applicant submitted that this email consisted of an admission as to the truth of the allegations he pleads in the proposed amended documents. That submission is untenable. Consent to filing an amended document does not amount to an agreement as to the allegations or matters contained in the document. The submission that the respondent was obliged to oppose the amendment if it wanted to contest the allegations contained within the amended document is entirely misconceived. In any event, as her covering email made plain, the respondent said that she considered the allegations wholly without merit.

48 Given the content of the documents, and the scandalous and unsubstantiated allegations contained within them, it might be thought that giving consent to amend was unwarranted. However, the respondent, understandably, was trying to avoid costs or delay associated with the application to amend. In no sense can the respondent be taken to be admitting the allegations.

49 Notwithstanding the respondent's consent, the judge was not bound to give leave. As he explained in his reasons, the proposed amendments contained allegations of impropriety without referring to supporting evidence. Moreover, the judge correctly considered that the allegations contained in the proposed amendments had no connection to any issue relating to Beling's appeals or applications for leave to appeal.

50 As his reasons makes clear, the judge considered the material and arguments advanced by the applicant. His conclusion that the amended notices of appeal contained unsubstantiated allegations of impropriety is plainly correct. It was well open to the judge to conclude that leave to amend should be refused. Indeed, in our view, there was no basis to permit the amendments. These grounds must be rejected.

51 Ground 7 is concerned with costs. The applicant's submissions involve no more than an assertion that the judge failed to consider the applications, submissions, and evidence.

52 The principles in House v The King[21] apply to any application for leave to appeal. More specifically, this Court has observed that appeals from orders as to costs are rightly treated as exceptional and require this Court to exercise particular restraint.[22] The authorities explain that the main rationale for that caution is that the trial judge is almost always best placed to assess in whose favour and to what extent the discretion as to costs should be exercised.

53 No error has been shown in the judge's orders as to costs. An order based on the usual rule that costs follow the event was plainly open to the judge.

[1] Beling v Legal Services Commissioner [2016] VSC 180 ('Derham AsJ Reasons').

[3] Victorian Legal Services Commissioner v Beling (Legal Practice) [2017] VCAT 1022.

[5] Beling v VLSC [2020] VSC 200.

[6] Beling v Victorian Legal Services Commissioner [2021] VSC 390 ('Reasons').

[7] Beling v Victorian Legal Services Commissioner (No 2) [2021] VSC 466.

[8] Supreme Court (General Civil Procedure) Rules 2015 r 30.02.

[21] (1936) 55 CLR 499; [1936] HCA 40 (Starke, Dixon, Evatt and McTiernan JJ).

[22] Transport Accident Commission v O'Reilly [1998] VSCA 106; [1999] 2 VR 436, 457 [46]; [1998] VSCA 106 (Ormiston JA); AJH Lawyers v Mathieson Nominees Pty Ltd [2015] VSCA 227, [89] (Hansen and McLeish JJA, Robson AJA agreeing at [92]); PCCEF Pty Ltd v Geelong Football Club Ltd [No 2] [2019] VSCA 148, [38]-[41] (Whelan, McLeish and Emerton JJA).