The issues in this costs application are assisted by reference to the following chronology
1. On 9 June 2021 the solicitor filed his administrative review application
2. On 2 July 2021 the Law Society filed documents with the Tribunal pursuant to s 58 of the ADR Act.
3. On 15 July 2021 the solicitor lodged an application for a Summons to be issued to the Law Society
4. On 30 August 2021 the Law Society filed an application to set aside the Summons. In support of the application the Society relied on the Affidavit of Anthony James Lean affirmed 27 August 2021. That affidavit disclosed that not all documents held by the Law Society had been reviewed for the purpose of compliance with s 58 (1) (b).
5. On 23 September 2021 the solicitor's counsel filed and served a written outline of submissions seeking an extension of time for the Law Society to provide all documents relevant to the review application but also relying on the Summons.
[2]
Consideration
I commence my consideration of this matter by reference to the Summons issued by the solicitor. I accept as relevant to this application my findings at [74] and [75] of my decision. It is useful that I repeat those paragraphs in full:
I am not satisfied the solicitor has established a legitimate forensic basis for the Summons, nor can I be satisfied that it is reasonably likely that documents relating to the investigation have relevance or will throw light on the review proceedings. In reaching this conclusion, I have taken into account the nature and extent of the material disclosed in the s 58 documents, and in particular the statutory obligations imposed on the Council under s 58(1)(b) of the ADR Act and that an order will be made extending time for the Council to provide further documents, if any, after examination of the files referred to in Mr Lean's affidavit.
I also accept that the documents sought by the Summons are very wide and potentially not relevant to the review application. Having regard to the wide nature of the Summons, I conclude it is oppressive. The proper application is the application now agitated by counsel for the solicitor under s 58(3) of the ADR Act.
I also take into for the purpose of this costs application that, in his initial correspondence to the solicitor, Mr Flax on behalf of the Law Society attempted to have the solicitor narrow the scope of documents to be produced pursuant to the Summons. In his email dated 5 August 2022 Mr Flax advised the Law Society had, in its view, provided all the documents relevant to the review, but noted that "The Summons captures a substantial number of documents, many of which are held in different electronic and physical repositories". The email also refers to the practical limitations of preparing documents for production during lockdown in the Greater Sydney Area.
The solicitor replied to Mr Flax on the same day suggesting in the circumstances it might be better to stand over the Summons for two months to 11 October 2021. Later the same day Mr Flax responded noting the Law Society did not agree to having the Summons stood over to 11 October 2021 and proposed to refer correspondence to the Tribunal. The solicitor consented to that proposal.
On 9 August 2021 Mr Flax sent an email to the solicitor requesting that he confirm whether he would limit the scope of documents sought in the Summons with a response requested by 11 August 2021. The solicitor responded advising that "due to the lockdown circumstances and workload, I expect to respond to you in approximately 3 to 3.5 weeks". The Law Society responded to the solicitor's email advising that the Law Society requested a response by 5pm on 15 August 2021 or that it would consider applying to the Tribunal to set aside the Summons.
Later, 9 August 2021, the solicitor responded by email to the Law Society as follows:
Your client can do whatever it wishes. In the lockdown circumstances, your client will unlikely be successful and I will rely on this email for costs on any application to set aside the Summons.
The onus should be on your client to establish the contents of the file do not have a legitimate forensic purpose. Not the other way around.
As I said, I will respond in 3 to 3.5 weeks.
On 12 August 2021 the Law Society sent an email to the solicitor. Having noted that the solicitor did not propose to respond by 16 August 2022 to the email of 9 August, that the Law Society proposed sending correspondence to the Tribunal proposing a time-table for an application to set aside the Summons and for provision of submissions and a listing date.
The solicitor responded to the Law Society's email on the same day noting that he did not consent to the proposals. He noted "What you should do is seek to set aside the Summons. Then we can thrash that out with NCAT. A timetable can be put together at the next directions hearing". I find reading that email in isolation from earlier correspondence is inappropriate.
While it is clear that the solicitor did not respond to the Law Society's request to narrow the scope of documents sought, some consideration must be given to the fact that both parties were corresponding during the time of lockdown due to COVID 19 and in context of the correspondence considered as whole.
I also accept that, at the hearing, counsel for the solicitor did not press compliance with the Summons but rather agitated the interlocutory application as one for compliance under s 58 (1) (b) of the ADR Act. As a result, the solicitor did not raise strenuous objection to the Summons being set aside.
I accept that, prima facie, the Summons sought documents beyond those relevant to the review, and was, in particular, directed in part to the investigation process which led to the disciplinary proceedings. These factors take the matters relevant for consideration to be ones which are out of the ordinary. I accept therefore it would be open to make an order for costs in favour of the Law Society.
I turn then to consider whether or not I should exercise the discretion afforded under s 60 (2) to make an order for costs in favour of the Law Society. I note the reliance of the Law Society on s 60 (3 (f). That provision requires consideration of s 36 (3) of the NCAT Act.
Section 36(1) and (3) of the NCAT Act provide as follows:
36 Guiding principle to be applied to practice and procedure
(1) The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.
(2) …
(3) Each of the following persons is under a duty to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal -
(a) a party to proceedings in the Tribunal,
(b) an Australian legal practitioner or other person who is representing a party in proceedings in the Tribunal.
I accept that the solicitor's response to Mr Flax's correspondence was that the issue should be "thrashed out" in the Tribunal. That response did not accord with the guiding principle and is a relevant factor to be taken into account in determining whether a costs order in favour of the Law Society should be made. Nor did the solicitor seek to narrow the documents sought in the Summons. However, I also take into account that, having regard to all the correspondence passing between the parties, two other matters are relevant to my consideration. First, Mr Flax's email of 9 August 2021 alludes to the fact that the Law Society had electronic and other repositories of documents and that there was difficulty accessing documents in the lockdown environment. But it was only when Mr Lean's affidavit was filed and served that it was apparent that not all files had been inspected for relevance to the review. Secondly, the solicitor sought a reasonable period of time to respond to the initial correspondence in the lockdown circumstances.
I consider there are other matters raised by the solicitor's submissions which are also relevant to my consideration. I accept that the Law Society was on notice after receipt of the outline of submission provided by counsel for the solicitor dated 23 September 2021 that what was sought was an extension of time for the Law Society to examine all its files to ensure proper compliance with s 58 (1) (b). By this time the solicitor was on notice of the content of the Lean affidavit. I note the hearing of the competing applications occurred on 25 October 2022 and as I recorded at [7] this became the primary application before me and reliance on the Summons was agitated as a "last resort" position, albeit not completely abandoned. Thus, I afford little weight to the submission that the solicitor's application was made late in the day as a relevant factor in the exercise of discretion.
Although the submissions of the Law Society very properly concede the solicitor had partial success in the application, I find that "success" is a relevant matter to be taken into consideration of the discretion under s 60(3)(g).
On balance, having regard to the position of both parties and the arguments cogently advanced by each of them, I am not satisfied that this is an appropriate case to depart from s 60(1). Accordingly, I propose to make orders dismissing the Law Society's application for costs.
[3]
ORDERS
1. The application for costs by the Council of the Law Society of New South Wales is dismissed.
[4]
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: 25 August 2022
The Law Society's submissions commence by noting correctly that in its application to set aside the Summons the Society sought orders under s 60 (2) of the NCAT Act.
The Law Society refer to authorities on the question of "special circumstances" by reference to two decisions of the Appeal Panel namely Choi v University of Technology [2020] NSWCATAP 18 at [41] and Commissioner for Fair Trading v Edward Lees Imports Pty Ltd (No 2) [2019] NSWCATAP 222 at [8].
In Choi at [41] the Appeal Panel explained as follows:
We agree with the then President of VCAT, Morris J that the general rule that parties should bear their own costs is designed to promote access to justice generally and to minimize the overall level of costs in tribunal proceedings as far as is practicable: Stonnington City Council v Blue Emporium Pty Ltd [2004] VCAT 1441 at [13].
In Commissioner for Fair Trading v Edward Lees Imports the Appeal Panel discussed "special circumstances" at [8]:
Section 60(1) provides that each party is to pay their own costs. However, the Tribunal has a discretion to award costs if satisfied there are special circumstances. Special circumstances mean circumstances which are out of the ordinary, but not necessarily extraordinary or exceptional: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [p11]. Relevant factors to consider in respect of special circumstances are those set out in s 60(3) of the NCAT Act.
The Law Society submit that it sought to avoid litigation in respect of the Summons and refer to correspondence sent by Mr Flax on behalf of the Law Society to the solicitor on 5 August 2021. Among the reasons advanced by Mr Flax in his correspondence was an assertion that the Summons was impermissibly broad and would catch documents which were not relevant to the review application.
The submissions set out a history of adjournments and refer to a response from the solicitor in which he said amongst other matters, "The onus should be on your client to establish the contents of the file do not have a legitimate forensic purpose. Not the other way around. As I said, I will respond in 3 to 3.5 weeks".
The submissions, at para 12, refer to correspondence to the solicitor from Mr Flax which referred to the Tribunal's decision in Youssef v NSW Legal Services Commissioner [2020] NSWCATOD 85 at [21] and asserted the documents sought did not fall within the category of documents referred to in Youseff. The solicitor is noted to have responded saying the matter should be determined in the Tribunal.
It is submitted that the solicitor "refused to engage constructively" with the Law Society and "that his insistence that the matter be 'thrashed out' before the Tribunal supplies the archetypal circumstance in which a costs order may be warranted". Reference is made to the comments of the Appeal Panel in Ain v Medical Council of New South Wales [2015] NSWCATAP 241 at [167].
The submissions refer to my findings at [73] of the decision and also at [75] where I explained that the documents sought went beyond those relevant to the review and that the summons was oppressive.
The Law Society refer to the oral application made by the solicitor's counsel and refer to that application as one which "had some limited success". However, it is submitted this should not distract the proposition that the Law Society should be granted costs of the application because (in summary):
1. The oral application was only made "at the very last moment".
2. The solicitor refused to withdraw the Summons in writing and orally before the hearing.
3. Any success enjoyed by the solicitor was "quite narrow" and no order was made under s 54 of the ADR Act.
The submissions at para 25 are as follows:
In truth, Mr Buckley's marginal success was not by reason of any legitimacy in his apparent proposition that documents sought in the Summons ought to have been included in the Section 58 bundle. The Tribunal's orders were designed purely to ensure procedural fairness in circumstances where there was a "lingering doubt" as to whether the Law Society's searches had captured all relevant documents when it had not "examined all documents it holds". [emphasis added]
The Law Society seeks its costs both of the application and the costs application.
The solicitor's submissions
The submissions commence by reference to the "normal" position of a successful party being entitled to costs. However, in this case it is submitted because of s 60 (1) of the NCAT Act, "success on an interlocutory argument, without more, does not take this case out of the ordinary run of cases".
The submissions note that, if it were not the Law Society's obligation to produced documents under s 58 (1) (b) of the ADR Act, that a Summons would be necessary to ensure procedural fairness to a practitioner such as the solicitor.
The submissions refer to the history of the matter, including the Law Society's advice contained in an email on 6 July 2021 that it had filed all documents under s 58 that the Society considered to be relevant. Reference is made to the reasons at [53]-[54] where I commented on the Affidavit of Anthony James Lean relied on by the Law Society, and found "there is room for some lingering doubt that the Council has given consideration to the relevance for the purpose of the review of all the documents it holds" [original emphasis]
The submissions refer to a number of authorities, including those of superior courts, which have considered the meaning to be given to the words "special circumstances" when those words appear in a statute. Reference is made to the decision of Kiefel J (as her Honour then was) in Secretary, Department of Family and Community Services v Chamberlain (2002) 116 FCR 348 at [19]. In this case her Honour was considering whether "special circumstances" existed to waive a social security debt. Her Honour explained:
19 The words "special circumstances" are not so imprecise as to require judicial gloss: Beadle v Director-General of Social Security [1984] AATA 176; (1985) 60 ALR 225, 228. In Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541, 545 I expressed the view that the words require something which distinguishes a person's case from others, something that sets it apart from the usual or ordinary case
Reference is also made to the decision of Hamilton J in Expile Pty Ltd v Jabb's Excavations Pty Ltd (2002) 194 LR 138; [2002] NSWSC 851. His Honour was dealing with an application to extend time for the hearing of a winding up application. In determining that matter, his Honour was required to consider whether there were special circumstances warranting the extension of time. At [5]-[6] his Honour explained:
The word "special" is an ordinary English word. The relevant definition of it as used in the present context appears to me to be that given in the Macquarie Dictionary (3rd ed, 1997) as follows:
"Distinguished or different from what is ordinary or usual: a special occasion"
The thrust of that definition is that "special" is used in contradistinction to "ordinary" or "common". "Special circumstances" is an expression that has been used in other statutes. One must always bear in mind in an exercise of statutory interpretation that one is interpreting the particular words in the context of the particular statute. However, cases decided on other statutes, whilst they cannot govern the situation, indicate that, where "special circumstances" is used in contexts like the present, it is used in the sense of the definition which I have quoted from the Macquarie Dictionary. Its essential meaning is that it denotes a particular situation which can be regarded as distinguished from the ordinary or common runs of situations. It has been found to bear this meaning in a number of other statutory contexts of a widely varying nature: eg Re Norman (1886) 16 QBD 673 per Lopes LJ at 677; Re Hunter (A Bankrupt), Ex Parte Exclusive English Imports Limited (In Liquidation) [1954] NZLR 747 per F B Adams J at 754; Clarks of Hove Ltd v Bankers' Union [1978] 1 WLR 1207 per Geoffrey Lane LJ at 1215; Springfield Nominees Pty Limited v Bridgelands Securities Limited [1992] FCA 472; (1992) 38 FCR 217 per Wilcox J at 225; Lyon v Wilcox [1994] 3 NZLR 422 CA per Casey J at 431; Peninsula Watchdog Group (Inc) v Minister of Energy [1996] 2 NZLR 529 CA per Richardson P at 536.
6 The other thing that may be said about the meaning of the words "special circumstances" in this context is that there should be no exhaustive attempt to define or list the matters which may come within the rubric "special circumstances" as used here: Re Norman ibid; Springfield Nominees ibid. The discretion is a discretion to be exercised by the Judge on the view that he or she takes of all the circumstances of each case. Having said that, I should emphasise that one feature of s 459R(2) is that an order may only be made under the subsection if the Court is satisfied that special circumstances exist and justify the extension. If no special circumstances exist, then that is an end of the matter. If there is nothing that can be characterised as special circumstances, the discretion cannot be exercised. If, however, special circumstances are found to exist, that does not compel or even necessarily authorise the exercise of the discretion. Those special circumstances must be found to justify the extension and whether or not an extension is granted is still within the general discretion of the Court, as emphasised by the word "may", which is the third word in s 459R(2).
Asserted factual errors.
The submissions challenge the solicitor's assertion that it had "incorrectly" advised him that the Society had complied with its obligations under s 58 (1) (b) of the ADR Act It is submitted my reasons disclose that I determined it was appropriate to review, out of an abundance of caution, certain repositories of documents which had not been considered by the Society.
It is submitted that the solicitor's submission the Summons only sought s 58 1) (b) documents is contrary to my findings at [74] and [75] and that the order extending time of compliance (referred to at [89]) was not to facilitate production of documents sought by the Summons but was to review the documents in the files referred to in Mr Lean's affidavit.
It is also noted that the solicitor's claims that he "reinvoked the primacy of the argument under s 58 (1) (b) of the Act while not disavowing reliance on upon the Summons" is wrong. Reference is made to the solicitor's submissions dated 22 September 2021 at [2].
Under the heading "Legal Errors in Mr Buckley's submissions" the Law Society's submissions refer to para 17 of the solicitor's submission. It is submitted that, as a matter of law, the proposition that it is necessary for the Law Society to "show some extraordinary feature of the Applicant's approach to the issue of the Summons" is wrong. Reference is made to the Tribunal's decisions which refer to special circumstances being those out of the ordinary but which need not be "exceptional or extraordinary", It is submitted that it would constitute legal error to depart from this standard of satisfaction by construing the level of satisfaction by considering special circumstances broadly having regard to the context of the words in the NCAT.
The other asserted legal error is directed to the solicitor's submission that the Society's success "without more does not take the case out of the ordinary run of cases". The submissions explain that the Society does not contend there are special circumstances solely because it succeeded on the application. The submissions explain:
Rather, the Law Society's position is that once the threshold inquiry - being whether there are 'special circumstances' solely because it succeeded on the Application. Rather, the Law Society's position is that once the threshold inquiry - being whether there are 'special circumstances' warranting the displacement of the usual rule in s 60 (1) of the CAT- has been surmounted, the Law Society's success in its Application is a conventional and persuasive factor bearing upon the Tribunal's exercise of its costs discretion, particularly in cases such as this where the Summons had no reasonable prospects of success given that it lacked a legitimate forensic purpose and was drafted so broadly as to be oppressive.
The submissions rely on Hamilton J's discussion at [6] where his Honour referred to the fact, in the context of the legislation he was construing, that "there should be no exhaustive attempt to define or list the matters which may come within the rubric of 'special circumstances' as are used here". I pause to note that s 60 (3) of the NCAT Act provides for a structured exercise of discretion when considering "special circumstances" which may favour making a costs order. The submissions also make reference to the comments of French J (as his Honour then was) in Secretary, Department of Security v Hales (1998) 82 FCR 145 that "[t]he concept of special circumstances is broad. A constellation of factors …may fall within it".
The submissions also refer to the fact that although "special circumstances" may be found, notwithstanding that fact, the Tribunal maintains a discretion to award costs.
At para 18, it is submitted that there is nothing uncommon in asking the Law Society to make its file available for review by the solicitor and that "still less" there is nothing unusual in relying on a compulsory procedure (a Summons) in circumstances where the Society asserted it had complied with s 58 (1) (b) "(which it had not)".
The submissions set out in detail the reasons which supported the solicitor's action in having the Tribunal issue the Summons. In summary, it is submitted:
1. That the Society had failed to inform the solicitor and the Tribunal it had not conducted a search of all its files to determine whether it had complied with s 58 (1) (b).
2. But for the Lean affidavit, the solicitor would have had no way of knowing that the files had not been searched thoroughly.
3. By its order of 7 July 2021, the Tribunal had not "closed the door" to the solicitor seeking further documents from the Society.
4. That the hearing before me focussed largely on the solicitor's oral application for compliance with s 58 (1) (b).
5. The provisions of s 58 (6), which envisages a party for review may seek a summons against an administrator, and the alternate procedure for access to a document if already lodged with the Tribunal.
6. That the application for Senior Counsel's costs is not warranted given the application was to set aside a Summons.
7. The solicitor was successful in his application under s 58 (1) (b).
In addressing the special circumstances relied on by the solicitor, the submissions dispute the solicitor's submission that the discretion under s 60 (2) is not enlivened because he was pursuing a reasonable line of enquiry. It is submitted "The plainly untenable premise upon which the Summons was issued renders Mr Buckley's reliance upon the disciplinary nature of these proceedings immaterial to the appropriate costs outcome".
The submissions in reply again highlight the fact that the solicitor sought documents relevant to the investigation of the complaints, an irrelevant matter, and that he did not attempt, despite the Law Society's offers, to narrow the scope of the Summons.
The submissions also challenge the solicitor's assertion that the Summons was necessary to ensure there had been compliance with s 58 (1) (b) of the ADR Act. It is submitted at the time the Summons was issued he had not identified any real basis to query the Law Society's compliance with s 58 (1) (b).
The Law Society's submissions again emphasise the fact reliance is placed on s 60 (3) (f) of the NCAT Act.
At para 16, the submissions state the following:
Even if the Tribunal is satisfied that there are special circumstances, the Tribunal must further be satisfied that there are circumstances 'warranting an award of costs': Fitzpatrick Investments Pty Ltd v Chief Commissioner of State Revenue [2015] NSWCATAP 103.
The submissions in reply conclude on the basis that the Tribunal should be satisfied its discretion to make a special costs order under s 60 (2) has been engaged.