Council of the New South Wales Bar Association v Berwick - [2018] NSWCATOD 95 - NSWCATOD 2018 case summary — Zoe

NSWNSWCATOD

Council of the New South Wales Bar Association v Berwick

[2018] NSWCATOD 95

NCAT Occupational|2018-06-18|Before: Dr J

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At a glance

Source facts

Court

NCAT Occupational

Decision date

2018-06-18

Before

Dr J

Source

Original judgment source is linked above.

Judgment (28 paragraphs)

[1]

reasons for decision

These reasons for decision deal with applications made by Fahmid Rahman (Mr Rahman) and John Patrick Berwick (Dr Berwick) for costs orders. The following short history explains how it transpired that those applications for costs orders were made.
On 2 April 2015 the Council of the New South Wales Bar Association (the Council) filed in the Tribunal an application (the application) for disciplinary findings and orders.
Three of the orders sought in the application were that Dr Berwick, pursuant to s 573 of the Legal Profession Act 2004 NSW (the Act), repay a sum of $33,000 to Mr Rahman and pay 2 amounts of compensation to Mr Rahman.
On 6 May 2016 there was filed in the Tribunal an instrument of consent made pursuant to s 564 of the Act, signed by the solicitor for each of the Council and Dr Berwick and signed by the Legal Services Commissioner.
On 23 May 2016 Mr Rahman sought an adjournment of the proceedings. The Tribunal explained to him that he had no right to seek an adjournment and that he would have an opportunity later on to appear before the Tribunal in relation to his claim for compensation.
The background and detail of the proceedings commenced by the application may be found in Council of the New South Wales Bar Association v Berwick [2016] NSWCATOD 81.
Dr Berwick was engaged to appear for Mr Rahman in proceedings in the Federal Magistrates Court of Australia and the above 3 orders sought in the application arose out of those proceedings. On 23 June 2016 the Tribunal made findings and orders as sought in the instrument of consent (see par 47 of the reasons for decision published on 23 June 2016 in Council of the New South Wales Bar Association v Berwick [2016] NSWCATOD 81).
In the Tribunal Mr Rahman made an application for compensation against Mr Dr Berwick by filing, on 8 November 2016, a general application form, file number 1620258, seeking 15 orders pursuant to s 571 of the Act. On 6 September 2017 the Tribunal made an order that Dr Berwick pay compensation to Mr Rahman in the amount of $25,000. It also made orders dismissing Mr Rahman's applications: (a) seeking leave to make a compensation request pursuant to s 570(4) of the Act and (b) to rely upon the application file number 1620258, (Council of the New South Wales Bar Association v Berwick (No.2) [2017] NSWCATOD 133).

[2]

Dr Berwick's written submissions filed 9 October 2017

Section 60 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) deals with the question of costs of proceedings in the Tribunal. The first 3 subsections provide as follows: 1. Each party to proceedings in the Tribunal is to pay the party's own costs. 2. The Tribunal may award costs in proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. 3. In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following: ….
There is then set out seven subparagraphs and Dr Berwick relied in particular on the following three of them: 1. whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings (subpar (3) (b)), 2. the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law (subpar (3) (c)), and 3. any other matter that the Tribunal considers relevant (subpar (3) (g)).
It was submitted that Mr Rahman was responsible for prolonging unreasonably the time taken to complete the proceedings by engaging in the following conduct: first, Mr Rahman pursued a claim for reimbursement to him of all moneys charged by Dr Berwick to Mr Rahman for legal services, in the amount of $33,000 without making any attempt to link the findings of unsatisfactory professional conduct or professional misconduct made by the Tribunal on 23 June 2016 neither with the conduct described in Mr Rahman's written submissions nor with what was relied upon by him as the compensable loss [2017] NSWCATOD 133 at [30].
It was submitted that this consideration was also relevant to s 60(3)(c), as Mr Rahman's claim for reimbursement of $33,000, in the way it was presented, had no tenable basis in fact or law.
Secondly it was submitted, Mr Rahman pursued a claim for compensation for amounts exceeding $25,000 in circumstances where Part 4.9 of the Act very clearly imposed a cap of $25,000 which applied to the whole of an applicant's complaint. It was submitted that this consideration was also relevant to s 60(3)(c), as Mr Rahman's claim for compensation over $25,000 had no tenable basis in law.
Thirdly it was submitted that Mr Rahman's application to make a compensation request pursuant to s 570(4) of the Act, and his application to rely upon the general application filed on 8 November 2015, were dismissed by the Tribunal; Mr Rahman's claim for compensation was confined to the application for a compensation order set out in the application for disciplinary findings and orders filed by the Council on 2 April 2015.
Finally, it was submitted Mr Rahman unreasonably rejected offers made to him which, if accepted would have avoided altogether the need for a hearing and determination of his claim. In each of those offers, Dr Berwick offered to pay Mr Rahman an amount exceeding $25,000 to settle the proceedings.
The written submissions then referred to the following three offers to settle the proceedings: 1. on 12 October 2015 Dr Berwick offered to settle the proceedings on terms that he pay compensation to Mr Rahman in the sum of $30,000, the application be dismissed with no order as to costs and Mr Rahman provide a written release in Dr Berwick's favour against the pursuit of any other claims. The letter stated that pursuant to ss 571(5) and 573(6) of the Act, a compensation order requiring payment of an amount exceeding $25,000 was not to be made unless both of the clients consented to the order; 2. on 24 November 2016, Dr Berwick made a further offer to settle the proceedings on terms that he pay Mr Rahman compensation in the sum of $30,00 all inclusive, the application be dismissed with no order as to costs and Mr Rahman provide a written release in Dr Berwick's favour against the pursuit of any other claim. The letter again referred to ss 571(5) and 573(6) of the Act and that Dr Berwick did not consent to the making of a compensation order in excess of $25,000; and 3. on 24 February 2017, Dr Berwick made a further offer to settle the proceedings, this time on terms that Dr Berwick pay Mr Rahman the sum of $54,000 plus costs as agreed or assessed, or $70,000 inclusive of costs. Payment of the settlement sum was to be made within 28 days of the exchange of an executed Deed of Settlement and Release, the application be dismissed with no order as to costs and Mr Rahman provide a written release in Dr Berwick's favour against the pursuit of any other claim. The letter referred to the $25,000 compensation cap pursuant to ss 571(5) and 573(6) of the Act.
It was submitted that Mr Rahman's failure to accept any of those offers was unreasonable especially given that each letter correctly identified that under the Act Mr Rahman's claim for compensation was capped at $25,000.
It was submitted that these written submissions showed that special circumstances had been made out and that a costs order in favour of Dr Berwick was warranted.

[3]

Mr Rahman's written submissions dated 20 December 2017

Mr Rahman seeks his costs of the proceedings brought by the Council including the costs of his application for compensation. He opposes the application for costs made by Dr Berwick.
Mr Rahman's written submissions include the following: 1. There was nothing in the wording of s 60 of the Act which restricts the Tribunal from ordering Dr Berwick to pay all of Mr Rahman's costs incurred in relation to the proceedings. 2. Mr Rahman was central to the prosecution by the Council of all aspects of the proceedings with which his legal rights were entwined. 3. He was made a party to the proceedings and also deposed the crucial evidence relied upon by the Council in its claim. 4. The Council's claim sought relief including compensation to be paid to Mr Rahman. 5. Mr Rahman's entitlement to compensation was entirely contingent upon the success of the Council's claims, thereby strengthening Mr Rahman's direct interest in the whole of the case. 6. In the compensation part of the proceedings, or in future proceedings brought in a court under the law of tort or contract, the same evidence Mr Rahman gave for the Council in relation to which he was liable to be cross examined, would be central and it was sensible for Mr Rahman to obtain legal advice in that regard. 7. Mr Rahman also had his own interest in seeing that his serious complaints against Dr Berwick were made out 8. For those reasons Mr Rahman was intimately involved in the whole of the litigation and it was fair and reasonable for him to obtain legal advice in relation to matters including the compensation claim "being brought for him by the Bar Association", the evidence he had to give, the response of Dr Berwick and other matters which Mr Rahman identified which he submitted were matters on which it was reasonable for him to obtain legal advice. 9. The words in s 60(3)(d) "the nature ……of the proceedings" were relevant to the exercise of the Tribunal's discretion on costs. 10. Dr Berwick denied and contested the allegations and complaints brought against him up until 6 May 2016 and there was a public interest that the complaints be heard. 11. As a result of Dr Berwick's culpability and his resisting the complaints it was inevitable that Mr Rahman as an innocent member of the public be extensively caught up in the proceedings and that he would reasonably require legal advice in relation to that involvement for the reasons set out above. In short, the admitted misconduct and unsatisfactory conduct of Dr Berwick, and his delay in admitting that conduct, had the effect of dragging the victim of that conduct into the proceedings. 12. These were special circumstances which took the proceedings out of the usual case and that an order in Mr Rahman's favour ought to be made. 13. So far as the costs of the compensation claim are concerned, Mr Rahman had reasonably incurred significant costs and the culpability of Dr Berwick was relevant to the assessment of costs. 14. Even after admitting unsatisfactory professional conduct and misconduct in relation to the services provided to Mr Rahman, Dr Berwick nonetheless denied Mr Rahman's entitlement to compensation on grounds which should not have been asserted. 15. Dr Berwick's attempt to knock out the claim on the basis that Mr Rahman's claim was made after disposal of the complaint when he was quite aware that the claim had been made at the outset of the proceedings did not reflect well on his case. 16. It could not reasonably have been in dispute that Mr Rahman was forced to incur significant legal costs to obtain the award of compensation and that the attack on Mr Rahman's sworn evidence was not reasonable. 17. It was reasonable to pursue all available claims to guard against the possibility of any claims failing given that Dr Berwick denied all of the entitlement to compensation. Dr Berwick's refusal to agree to an increase in the cap forces Mr Rahman to bring separate proceedings if he wants due compensation. The fact that the award was capped did not take away from the findings in relation to the compensation payable.

[9]

Dr Berwick's reply submissions dated 2 February 2018

These reply submissions included the following: 1. Mr Rahman's claim for costs of the application filed by the Council on 2 April 2015 founded upon the incorrect premise that he was "made a party to [those] proceedings." 2. That premise was incorrect and Mr Rahman was never a party to the proceedings filed on 2 April 2015. As identified in that application, the instrument of consent filed 6 May 2016, the reasons of the Tribunal delivered on 23 June 2016 and the reasons delivered on 21 March 2017, the parties to those proceedings were the Council as applicant and Dr Berwick as respondent. 3. Whilst Mr Rahman was a proceeding party to the general application filed on 8 November 2016, that application for compensation was dismissed. The appropriate order for costs in those proceedings was one in favour of Dr Berwick. 4. Accordingly, Mr Rahman did not have standing to seek a costs order in the proceedings commenced by the Council on 2 April 2015. The jurisdiction to award costs under s 60 of the NCAT Act was confined to costs against a party to proceedings. Although that was not stated in terms in s 60(2) of the NCAT Act, it was a construction that was supported by the references to "party" and "parties" in ss 60(1) and 60(3)(a), (b), (c) and (f). 5. Even if this construction be wrong, and the power did exist under s 60 to award costs in favour of a non-party, no order for costs should be made in favour of Mr Rahman as the matters referred to by him in support of the application did not constitute special circumstances. No real effort had been made to engage with the requirements of the section or to explain, by reference to the factors in s 60(3) of the NCAT Act, why special circumstances exist. Instead the central ground relied upon was the fact that Mr Rahman gave evidence in the proceedings on behalf of the Council. Merely because a person agreed to participate in proceedings as a witness did not give rise to an entitlement to costs. Still less did it constitute special circumstances as required by the section. Therefore no further costs order should be made in the proceedings commenced by the Council on 2 April 2015.

[14]

Mr Rahman's reply submissions dated 15 March 2018

Mr Rahman maintained that he was a party to the proceedings commenced by the Council on 2 April 2015. He relied upon the orders set out in pars 104 and 105 of the Tribunal's reasons for decision given in the proceedings commenced by the Council on 2 April 2015. Those paragraphs were then quoted. They were in the following terms: 104. In the matter of the Council of the New South Wales Bar Association v John Patrick Berwick file number 2015/00383754 (1520067); the Tribunal makes the following order: (1) Order that the respondent John Patrick Berwick pay compensation to the applicant Fahmid Rahman in the amount of $25,000. 105. In the matter of Fahmid Rahman v John Patrick Berwick file number 2016/00378818 (1620258); the Tribunal makes the following orders: (1) The application of Fahmid Rahman seeking leave to make a compensation request pursuant to s570 (4) of the Legal Profession Act 2004 is dismissed. (2) The application by Fahmid Rahman to rely upon the application number 1620258 filed on 8 November 2015 is dismissed.
The submission continued: "that is, Mr Rahman was a party, namely the Applicant, in proceedings 2015/0038754 (1520067) and accordingly the Tribunal has power to make a costs order in those proceedings as sought."
These reply submissions of Mr Rahman were completed as follows: 1. Accordingly pars three and four of the submissions of Dr Berwick were misconceived. 2. The special circumstances relied upon for the making of the costs order in relation to the disciplinary part of the proceedings were quite clear from Mr Rahman's submissions. They were stated in Mr Rahman's principal cost submissions to be: "in short, the admitted misconduct and unsatisfactory conduct of Dr Berwick, and his delay in admitting that conduct, had the effect of dragging the victim of that conduct into the proceedings." 3. As a member of the legal profession, Dr Berwick should have made an early admission of all wrongdoing rather than subjecting Mr Rahman to the delays and stresses of the proceedings which compounded the culpability which was the subject of the Council's complaints. The failure to do so constituted special circumstances. 4. No order for costs was sought in the dismissed proceedings, but the work done in commencing those proceedings was reasonably incurred in the circumstances to progress the claims in the proceedings commenced by the Council. It was only during the course of argument that Dr Berwick consented to the course which made further conduct of the proceedings commenced by the general application, unnecessary. 5. Where at par 14 of his submissions on costs, Dr Berwick asserted that it was notable that Mr Rahman had neither brought any proceedings against Dr Berwick to date, nor foreshadowed that he intended to do so in the future, they purport to give evidence through submissions about what has occurred since the judgment the subject of the costs dispute. In answer to that asserted factual case, Mr Rahman stated in those written submissions that to pursue his costs claims against Dr Berwick he commenced proceedings against Dr Berwick in the Supreme Court by way of an appeal against the judgment in these proceedings. In those proceedings a referral was made for pro bono assistance. Upon receiving advice consequent upon that referral, he discontinued the Supreme Court proceedings and advised Dr Berwick that he intended to pursue the balance of his loss in fresh proceedings in the District Court. 6. To the extent necessary, Mr Rahman sought leave to adduce the relevant email exchange in evidence on costs to reply to the factual representations made by Dr Berwick in his submissions without the relevant evidence, together with the Supreme Court's pro bono referral letter. 7. The other matters raised in Dr Berwick's submissions were sufficiently traversed in Mr Rahman's submissions in chief.
As the submissions seek to rely upon an email exchange between the parties, we do not see the need for leave to be granted to adduce the emails. We are of the view that we can accept that the email exchange advised Dr Berwick that Mr Rahman intended to pursue the balance of his alleged loss in fresh proceedings in the District Court.

Council of the New South Wales Bar Association v Berwick

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Judgment (28 paragraphs)

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