di Suvero v New South Wales Bar Association

1 In proceedings before the Legal Services Division of the Tribunal, the practitioner was found guilty of unsatisfactory professional conduct in several respects as particularised in an information laid pursuant to Part 10 of the Legal Profession Act 1987 (the Legal Profession Act) by the Council of the Bar Association (the Bar Council). Not all particulars of alleged unsatisfactory professional conduct were established to the satisfaction of the Tribunal. 2 The practitioner appealed to the Appeal Panel against the decision as to guilt, and the consequent decisions as to penalty and costs. 3 In an earlier decision delivered 29 March 2001 the Appeal Panel dismissed an appeal by the practitioner in relation to the Tribunal's decision as to guilt: di Suvero v New South Wales Bar Association (LSD) [2001] NSWADTAP 9. In that decision the Appeal Panel noted that the further grounds of appeal relating to penalty and to costs remained to be considered. The practitioner has now withdrawn his appeal relating to penalty. This decision deals with costs. 4 At the time of that appeal decision, the primary Tribunal had not issued its reasons for its decision in relation to costs. It did so on 28 May 2001: Bar Association of New South Wales v di Suvero. The Tribunal below had, in the usual course, received oral submissions on costs at the conclusion of its proceedings and also received short written submissions on costs from the practitioner and the Bar Council. 5 The provision relevant to costs of proceedings conducted pursuant to the Legal Profession Act is s 171E of that Act: ' 171E. Award of costs by Tribunal (1) The Tribunal may make orders requiring a legal practitioner whom it has found guilty of unsatisfactory professional conduct or professional misconduct to pay costs (including the costs of the Commissioner, the appropriate Council and the complainant). (2) If, after it has completed a hearing relating to a complaint against a legal practitioner, the Tribunal is satisfied that the practitioner is not guilty of unsatisfactory professional conduct or professional misconduct, the Tribunal may (but only if it considers that special circumstances so warrant) order payment from the Public Purpose Fund to the practitioner of the legal practitioner's costs. (3) An order for costs: (a) may be for a specified amount or an unspecified amount, and (b) if for an unspecified amount, may specify the basis on which the amount is to be determined, and (c) may specify the terms on which costs must be paid.' 6 The Tribunal ordered that the practitioner meet the costs of the Bar Council in respect of the proceedings. 7 The reasons for decision are brief, and are set out in full below: '(1) Following our decision on 5 May 2000, submissions were put to us on the question of the costs of the hearing. (2) In brief, the Bar Association submitted that the barrister should be ordered to pay all of the costs of the proceedings. (3) The barrister submitted that he should get the costs of the issues on which he succeeded or that he should only pay the costs for the issues on which he did not succeed. Finally, he submitted that each side should pay its own costs. (4) In our opinion, the barrister should be ordered to pay all of the costs of the Bar Association. The Bar Association acted reasonably in pursuing the charges it pressed and we see no reason that it should not have its costs.' 8 The practitioner's appeal partly relies on circumstances that have arisen since the close of the submissions on costs before the primary Tribunal. Those new circumstances were not taken into account by the Tribunal in its ruling. They concern the collapse of his professional indemnity insurer. 9 The following circumstances are agreed or not in dispute. The practitioner's professional indemnity insurer, HIH Casualty and General Insurance Limited (HIH), went into liquidation on or about 15 March 2001. The practitioner at all material times has held an indemnity policy with HIH which policy contained cover for the costs of disciplinary proceedings. He must now look to the liquidator to meet claims under his policy for which HIH would have been liable. The likelihood is that he will now end up having to meet the costs order made against him personally save for any part that is met by way of claim on the policy from the proceeds of the liquidation. 10 The practitioner's grounds of appeal are: 1. The Tribunal erred in law by deciding the barrister pay all the costs of the proceedings and not just the costs on the issues he did not succeed [sic]. 2. The Tribunal erred in law by not limiting the costs awarded to the extent of the barrister's cover under the professional indemnity insurance policy he was required to secure by law as a condition of the issuance of a practising certificate. 11 Before turning to consider the grounds of appeal, we note that in Wentworth v Rogers (1986) 6 NSWLR 642, the Court of Appeal stated that it will not grant leave to appeal against a discretionary order for costs unless the Court can be satisfied that there is some good reason for doing so. 12 Appeals to the Appeal Panel of this Tribunal are not governed by a leave requirement. Nonetheless the Appeal Panel should, we consider, exercise considerable caution in interfering with a costs order made at the trial level. 13 The unsuccessful party has to persuade the Tribunal why the ordinary costs order should not be imposed. There is, we consider, no duty on the Tribunal to respond in detail to a submission as to why it should depart from a general practice as to the award of costs. (See the observations in Graham v Director General, Department of Community Services [2001] NSWADTAP 4 where a party was seeking to persuade the Tribunal not to apply the usual rule in cases brought under the Anti-Discrimination Act 1977 - there each party bears their own costs.) Proportion of Costs Only 14 The first ground of appeal relates to the way the Tribunal dealt with his submission that he should not be obliged to pay costs in respect of the charges which were not established. 15 The proceedings were conducted over 5 days. Ms Abadee for the Bar Council said that there were three full days and part of a fourth devoted to evidence, the remainder to submissions. The Appeal Panel was provided with the written submissions on costs that were before the Tribunal. The Council submitted that it should be awarded full costs as it had succeeded in its primary task of establishing that the practitioner was guilty of unsatisfactory professional conduct. 16 Before the Tribunal below, Mr McAlary QC, counsel for the practitioner, had replied: 'It would be unjust to mulct the barrister with the Bar Association's costs of prosecuting issues against the barrister which the Bar Association should not have litigated'. The Bar Association can claim its costs upon issues on which it succeeded, but not on issues on which it failed. Justice would require the Bar Association should pay the barrister's costs of such issues, but we concede the legislation provides otherwise.' 17 There were ten particulars of the information laid against the practitioner, with four wholly successful, five wholly unsuccessful, and one partly successful. 18 While the usual practice in jurisdictions where costs follow the event is that an order for costs is made in favour of the successful party, it sometimes occurs that a reduced award is made to take account of matters on which that party failed to succeed. The successful party may be deprived of an award of costs if it is considered not to have acted reasonably in raising issues on which it has failed. For a recent illustration of this point see Permanent Trustee Australia v FAI [2001] NSWCA 20; (2001) 50 NSWLR 679 at [148]-[151] per Handley JA. The practitioner referred to other illustrations of this approach, for example Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749 at 809. 19 McHugh J noted in Latoudis v Casey (1990) 170 CLR 534 at 568 that where a plaintiff in civil proceedings 'sues on two causes of action and succeeds on one, he or she will obtain the general costs of the action on which he or she succeeded, but the defendant will receive the costs of the cause of action on which he or she was successful: Greeves v Freshwater (1938) 55 WN(NSW) 113.' 20 In Waters v PC Henderson (Australia) Pty Ltd, unreported, NSWCA, 6 July 1994, Mahoney JA said: 'unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate those particular issues on which it was successful and those on which it failed.' 21 The exception was applied recently in South Sydney Council v Royal Botanic Gardens (No 2) [2000] NSWCA 242 at [6]. In that case an appeal against an award of all costs in favour of the successful party were varied so that the unsuccessful party had the award discounted in relation to several issues upon which the successful party had been unsuccessful. After quoting Mahoney JA's words above, the Court said: 'Assuming in the Council's favour that that is the appropriate test, the group of issues on which it failed is sufficiently separable from the issues on which it succeeded to justify an order that takes account of the circumstances that each party enjoyed partial success.' 22 How do these tests apply to the present circumstances? In this instance a single information contained 10 separate particularised allegations of unsatisfactory professional conduct. The conduct particularised all related to the practitioner's conduct during a trial. Ms Abadee, counsel for the Bar Council, submitted that it was a single context that gave rise to the proceedings against the barrister. While the Council had not established all particulars to the satisfaction of the Tribunal, it had succeeded in establishing several and in demonstrating that in each of those regards the barrister had been guilty of unsatisfactory professional conduct. 23 The practitioner reiterated the submissions made by his counsel at first instance. 24 The primary Tribunal is in the best position to make an assessment of these issues. The South Sydney Council case does, however, demonstrate that the primary Tribunal's exercise of discretion can be upset if it is considered to have miscarried significantly. We are not satisfied that this such a case. 25 The Tribunal was satisfied that the Council had behaved reasonably in its conduct of its case. It indicated in its reasons that it had considered the submissions to the effect that the practitioner should be given some relief from a full costs award. It was not persuaded. As Ms Abadee noted, the items of conduct particularised by way of ten charges in the information all concerned the practitioner's behaviour at a criminal trial. The practitioner in response noted that he had not been the subject of a 'course of conduct' charge but rather a number of short exchanges which had been particularised and made the subject of individual charges. He considered therefore it he should be relieved from costs to the extent that the charges failed. 26 If an informant in a professional discipline proceeding substantially succeeds there would in our view have to be quite exceptional circumstances to deprive the informant of a full costs order. We agree with the Tribunal below that the critical question is whether the informant acted reasonably in bringing forward the particular charges, and whether it conducted itself reasonably at the hearing. It is plain, though the reasons are short, that the Tribunal was satisfied in those regards. 27 We do not see this as a case analogous to the kind to which McHugh JA alluded, of separate causes of action being alleged. Here the issues related to the standard of conduct of the practitioner at one event - a trial - albeit a long trial. 28 The first ground of appeal is rejected. Capping Costs Orders to take account of Insurance Cover 29 The second ground of appeal calls on the Appeal Panel, as we see it, to make new law. The practitioner was unable to point us to any authority for the proposition that it is an error of law if in the exercise of the costs discretion the Tribunal does not limit the costs awarded to the extent of the barrister's professional indemnity cover. 30 In its submissions to the Tribunal Mr Garling SC for the Council had said (see vol 3 of the Appeal Book 813:25-30): 'In addition we would submit he [the practitioner] ought to pay the costs of the proceedings. I can inform you that any order for costs made by the Tribunal is subject to a right of indemnity under the standard professional indemnity policy.' 31 There is no reference to Mr Garling's submission in the reasons for decision of the Tribunal. The practitioner submits that it is implicit that the Tribunal made the order for costs on the assumption that the practitioner would not be called upon to carry the costs personally. 32 Even if it could be shown that the Tribunal did take this submission into account, we doubt that it could be regarded as involving a relevant consideration, as the making of a costs order is an ordinary consequence of litigation for an unsuccessful party. The financial capacity of the unsuccessful party to meet the order is an issue for the successful party to address when seeking to enforce the order. Artificial as the contrast may seem to the unsuccessful party, the Tribunal only takes into account the financial circumstances of the unsuccessful party when considering the amount of any monetary penalty by way of punishment for the offence. 33 The purpose of the order for costs is that they are compensatory, and 'they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings': per Mason CJ in Latoudis v Casey at 543. 34 In that case the issues related to whether successful defendants in summary criminal proceedings could receive an award of costs where there is a statutory discretion to award costs. McHugh J observed (emphasis added) at 569: ' … a magistrate ought not to exercise his or her discretion against a successful defendant on grounds unconnected with the charge or the conduct of the litigation. The fact that the informant has acted in good faith in the public interest or may have to meet the costs out of his or her own pocket is not a ground for depriving the defendant of his or her costs.' See also Re Minister for Immigration and Ethnic Affairs; ex p Qai Lin (1997) 186 CLR 622 per McHugh J at 628-9: whether a party is legally aided is a 'totally irrelevant factor' when considering the exercise of the costs discretion. 35 Our attention has not been drawn to any principle that can be said to require the exercise of the costs discretion to take into account the practical ability of the unsuccessful party to meet the order; nor to any principle that requires adjustment of costs orders to take account of whether the unsuccessful party is insured. 36 The observations of McHugh J would appear to stand in the way of such propositions, as would the several references in Latoudis v Casey that the discretion should not be exercised against a successful party on grounds unconnected with the conduct of the litigation (e.g. per Mason CJ at 543 (existence of legal aid), per Toohey J at 563-565 and per McHugh J at 570 (circumstances surrounding prosecution)). We do not consider to be relevant the analogies from the law of negligence that were relied upon by the practitioner, where reference has been made to the growth of insurance as a factor influencing the standard of care: e.g. per Kirby P in dissent in Holland v Tarlinton (1989) 10 MVR 129 at 133; and per Kirby P in dissent in Western Suburbs Hospital v Currie (1987) 9 NSWLR 511 at 518. 37 Finally we note that in his submissions at hearing the practitioner referred to an early High Court case, Maiden v Maiden (1909) 7 CLR 727. In that case, the Court (per Griffiths CJ at 739) stated that it would not interfere with a lower Court's discretion as to costs 'when exercised upon a correct appreciation of the legal bearing of the facts.' Griffiths CJ continued, 'But if it appears that the Court acted on an erroneous view of the legal position this rule does not necessarily apply.' In that case the Court was satisfied, on the basis of the lower Court's findings of fact, that the lower Court had taken an erroneous view of the legal position as it arose from the facts. It substituted an order that each party bear their own costs for one in favour of the plaintiff. 38 This case does not present an analogous situation. There has been no misapprehension of the facts in any relevant sense. The facts that the practitioner was insured by HIH, and that it has now collapsed, were not facts in issue in the substantive proceedings. 39 The second ground of appeal is rejected. Order The decision under appeal is affirmed.

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