Solicitors:
Karen Bernadette Mobbs (plaintiff)
NEW Law (defendant)
File Number(s): 2018/036108
[2]
Judgment (EX TEMPORE, REVISED)
This is an application by summons for leave to appeal a costs order made in the Civil and Administrative Tribunal. The plaintiff brought proceedings against the defendant in April 2017 by way of an application to the Tribunal for disciplinary findings and orders. The defendant had been a Registered Nurse since 2004. The Tribunal found all three of the plaintiff's complaints against her proved but not in all particulars. The decision is published at Health Care Complaints Commission v Ake [2018] NSWCATOD 7. It was handed down on 5 January 2018. At [165] of the Tribunal's reasons it was found that the defendant was guilty of unsatisfactory professional conduct pursuant to s 139B of the Health Practitioner Regulation National Law (NSW) and professional misconduct under s 139E. The Tribunal ordered the defendant's registration as a nurse be cancelled with no right to apply for reinstatement for twelve months.
The plaintiff had sought an order that the defendant pay its costs of the inquiry before the Tribunal concerning the complaints. The defendant had admitted one particular of the conduct alleged against her under complaint 2 but she had not admitted that it amounted to unsatisfactory professional conduct. She disputed the plaintiff's other particulars under all three of the complaints made and she denied that she was guilty of professional misconduct. The defendant submitted to the Tribunal that the parties should bear their own costs of the inquiry. The respective submissions regarding costs were made prior to the Tribunal publishing its reasons for decision on the complaints, substantively.
When it did publish its reasons for decision, the Tribunal ordered that the parties pay their own costs and gave the following reasons:
[170] In respect of costs the Tribunal had regard to the fact that the applicant proved part of its complaint and failed to prove part of its complaint. In the circumstances the Tribunal was comfortably satisfied that each party should bear its own costs.
The plaintiff's complaints were concerned with the care of a 74-year-old female inpatient at a facility at Manly where acute care is provided for older mental health patients. The patient had a long history of schizophrenia and anorexia nervosa. She had been admitted to Hornsby Hospital due to a psychotic relapse sometime in June 2015 and on 17 June 2015 she was admitted to the Manly Acute Care Facility.
The defendant was the Senior Nurse in charge of the unit in which the plaintiff was being cared for on the night of 3 to 4 July 2015. The patient was in a shared room. She died in her bed early on 4 July 2015 and was pronounced dead at 7:00 am. The cause of death, according to the Tribunal's reasons, was not determined.
Complaint 1 of unsatisfactory professional conduct was supported by particulars to this effect:
1. Failure to make or cause to be made adequate basic observations of vital signs at 15 minute intervals between 9.30 pm on 3 July and 6:00 am on 4 July 2015.
2. Failure to ensure the patient's observations chart was completed accurately and contemporaneously.
3. Failure to conduct basic observations and to recognise deterioration in the patient's condition between 2:00 am and 6:00 am on 4 July 2015.
4. Failure to take appropriate action on finding the patient unresponsive at approximately 6:00 am on 4 July in that the defendant prioritized changing the patient's soiled bed linen and clothing and failed to make basic observations or to call the Rapid Response Team (RRT).
5. Failure adequately to convey to another nurse the urgency of the patient's situation in the early morning of 4 July 2015 and failure to convey that the RRT should be called.
The Tribunal found all but particular (2) of the particulars given under complaint 1 established. In relation to particular (2) the plaintiff conducted a case that the defendant had made entries in advance on the patient's observations chart so that the entries as written were not a contemporaneous record of observations, as they purported to be, and were therefore false. In essence this was an allegation of dishonesty which the defendant denied and which the Tribunal did not find proved. On its findings that particulars (1), (3), (4) and (5) were proved the Tribunal was satisfied that the defendant had been guilty of unsatisfactory professional conduct as alleged in complaint 1.
Complaint 2 was also of unsatisfactory professional conduct and was advanced upon particulars to this effect:
1. That the defendant recorded and signed entries on the patient's observations chart as if the observations had been made at 15 minute intervals, when this was not the case. This particular is repetitive of particular (2) under complaint 1 and the Tribunal did not find it proved.
2. That the defendant completed the patient's clinical record of the events of the morning of 4 July 2015 retrospectively on 10 July 2015. Although admitting this particular, the defendant did not admit that it amounted to unprofessional conduct.
Complaint 3 alleged professional misconduct relying upon particulars (4) and (5) of complaint 1 and on complaint 2. The Tribunal at [164] determined that the matters proved in relation to each of "complaints 1 and 2 either taken individually or together constitutes sufficient proof that the respondent is not only guilty of unsatisfactory professional conduct but is guilty of professional misconduct".
I infer that these complaints were referred by the plaintiff to the Tribunal pursuant to s 145C(1)(b) of the Health Practitioner Regulation National Law. Under cl 13 of Schedule 5D the Tribunal had power to award costs. Schedule 5 to the Civil and Administrative Appeals Tribunal Act 2013 (NSW) governs the composition and procedure of the Tribunal when it deals with inquiries concerning regulated occupations, such as the inquiry into the defendant's conduct. Clause 29(4) of Sch 5 permits an appeal to this Court "as of right on any question of law, or with the leave of the Court on any other ground". Clause 26(6) provides that no appeal lies from a decision as to costs except by leave of the Court.
I was informed from the Bar table that the plaintiff's costs in the Tribunal, which are what is at issue upon this application for leave to appeal, were approximately $15,000. This is relevant to whether leave should be granted. In considering past decisions of the Court, including the Court of Appeal, on the principles relevant to a grant of leave, it is necessary to be careful to distinguish between different types of circumstances in which leave is required. For example, applications for leave to appeal interlocutory decisions on matters of practice and procedure (which this is not) are affected by their own special considerations concerning dispatch of Court business and efficiency in the administration of justice. Statutory provisions imposing leave requirements for appeals from the District Court and from the Local Court are strongly affected by the consideration that the amount in issue and the relative importance of the litigation for the parties may not be sufficient to warrant re-examining a first instance decision. Leave requirements in relation to appeals from costs orders are always affected by the consideration that the decision under appeal is discretionary and that cost orders are ancillary to the disposition of substantive issues in controversy.
In Carolan v AMF Bowling Pty Ltd [1995] NSWCA 69 the Court of Appeal considered an application for leave to appeal from a decision of the District Court in which damages of under $10,000 had been awarded. Sheller JA, with whom Kirby P and Cole JA agreed, said:
In order to be granted leave to appeal the applicant must demonstrate something more than that the trial Judge was arguably wrong.
Kirby P (as his Honour then was) held that leave might be granted if an "issue of general principle or of public importance" was involved or "if an injustice were demonstrated". This decision has been cited and applied frequently in subsequent cases. A number of them are collected in Be Financial Pty Ltd v Das [2012] NSWCA 164 in the judgment of Basten JA at [32]-[36]. That case was another application for leave to appeal from a District Court decision in which damages of $20,000 had been awarded and the applicant claimed that the award should have been over $90,000. At [33] Basten JA quoted, with approval, from the judgment of Campbell JA in Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 as follows:
Ordinarily it is appropriate to grant leave to appeal only concerning matters that involve issues of principle, questions of general public importance or an injustice which is reasonably clear in the sense of going beyond what is merely arguable.
The same formulation was more recently picked up by Bathurst CJ in The Age Co Ltd v Liu [2013] NSWCA 26 at [13]. No question of general principle or of public importance arises in the present case because the principles required to be applied by the Tribunal in awarding costs in a health care professionals' disciplinary matter have been stated with the utmost clarity by the Court of Appeal. I refer to the judgment of Emmett JA in Health Care Complaints Commission v Philipiah [2013] NSWCA 342. In particular, I refer to [42]-[45] of the judgment, as follows:
[42] As a general rule, costs of proceedings before the Tribunal should follow the event and mere impecuniosity is not a justifiable reason for departing from that rule. However, there are factors that might militate against the recovery by the Commission of all of its costs in particular proceedings. For example, one factor might be that the Commission failed to obtain findings of professional misconduct alleged, even though it obtained findings of unsatisfactory professional conduct. Another factor might be that the Commission failed to establish all of the particulars of professional misconduct alleged. Where discrete elements of the conduct complained of are not established, that may be relevant. A third factor might be oppressive conduct by the Commission in the way in which it prosecuted the proceedings before the Tribunal, such as taking procedural steps that gave rise to unnecessary expense in preparing for the hearing (see Lucire v Health Care Complaints Commission (No 2) [2011] NSWCA 182 at [48]-[52]). It has not been suggested by the Doctor that any of those factors applied.
[43] As the Tribunal observed in its reasons, the question of costs is discretionary. However, the discretion is a judicial one and must be exercised according to proper fixed principles and rules of reason and justice, not according to private opinion. While it is not easy to state the precise principles that are to guide a court in exercising the discretion over costs, the discretion is only to be exercised where there are materials upon which to exercise it (Williams v Lewer (1974) 2 NSWLR 91 at 95).
[44] It is important when exercising the discretion to bear in mind that costs are intended to compensate a successful party. Costs are not intended to penalise an unsuccessful party. It is not an appropriate basis for the exercise of the discretion that an order for costs may cause hardship to the party against whom the order is made.
[45] The Doctor could have made admissions as to professional misconduct and as to the degree of impairment immediately after he was notified of the complaints. However, he chose not to do so. The normal price to be paid for a practitioner's disputing a complaint and losing is that, unless some disentitling conduct be established on the part of the Commission, the practitioner should bear the Commission's costs, not by way of penalty, but to compensate the Commission for the costs that it has incurred in prosecuting the proceedings in the public interest, over the opposition of the practitioner.
Emmett JA's clear statement of the principles applicable to precisely this sort of case has not been doubted in any subsequent decision. The question for which leave to appeal is sought in the present case is only whether the principles were applied. That invokes the last limb of Campbell JA's formulation in Jaycar Pty Ltd v Lombardo, namely, that there is an injustice demonstrated which is reasonably clear in the sense of being more than merely arguable.
To assess whether this is shown by the plaintiff in the present case it is logical to consider first the plaintiff's proposed appeal ground 2: that the Tribunal erred in law by failing adequately to state its reasons. The plaintiff's arguments on this were advanced in writing at pars 34-38 of its written submissions.
I find it reasonably clear that the Tribunal recognised costs would be awarded in favour of the party which was overall, and in net terms, successful in the proceedings unless there should be something in the way the plaintiff conducted its case and/or any issues on which it won or lost which would warrant disallowance of costs or an offset to them. The Tribunal clearly treated the plaintiff's lack of success on particular (2) of complaint 1 and particular (b) of complaint 2 (which, as I have said before, were substantially the same thing) as such a factor.
I consider it no more than barely arguable that this brief statement of reasons by the Tribunal is insufficient. The requirement to give reasons is important and has been often stated: Campbelltown City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284 at [130]. If the requirement is not observed then an error of law will be demonstrated. The statement of reasons for a costs determination may suffice although very brief. This is particularly so at the end of a long statement of reasons in which the Tribunal set out in detail the competing evidence and submissions and in which it fully stated why the Tribunal resolved factual issues and matters of evaluation such as the application of professional standards in the way that it did. I do not consider there is any significant prospect of succeeding on a ground of appeal that there was an insufficient statement of reasons.
The plaintiff wishes to agitate, under its appeal ground 2 (as developed in pars 28-32 of its submissions) that the Tribunal applied wrong principles. The first alleged wrong principle is said to be that the Tribunal adopted a "simplistic" approach to what the plaintiff had succeeded upon and where it had failed, rather than an "evaluative" approach. I do not consider that this allegation of specific error of principle, of itself, has any significant prospect of success on the proposed appeal.
The Tribunal devoted over 40 pages to consideration of the course of the proceedings, the competing submissions, what was proved and what was not proved. It had heard evidence for a day and taken oral submissions for a further day, followed by extensive written submissions after that. I see no basis for attributing to the Tribunal even arguably that it took a "simplistic" approach of scoring particulars won and lost in order to determine the incidence of costs. The question of whether the Tribunal's evaluation of the parties' respective successes should have translated into an order that the plaintiff should bear its own costs, notwithstanding vindication of the charge of professional misconduct, is another matter.
A second alleged error of principle is that the Tribunal failed to accord the plaintiff procedural fairness by awarding costs on the basis of matters not the subject of argument. Again I do not find this proposition arguable, but if it is it is barely so and not of such strength of itself to warrant a grant of leave. It was clear at the end of oral argument and it remained clear in the subsequent exchange of written submissions that the defendant contended the parties should bear their own costs. There were a number of contested factual issues and the Tribunal reserved its decision upon them. The plaintiff had ample opportunity to submit whatever it wished about how the costs discretion should be exercised in the event of partial success. In short, it did have an opportunity to be heard and could not in this Court mount a viable ground of appeal to the contrary.
Finally, the plaintiff invokes the last category of error which was considered in House v The King (1936) 55 CLR 499; [1936] HCA 40. That is, as Dixon, Evatt and McTiernan JJ said (at 505):
It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court at first instance. In such a case, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
The plaintiff contends that not to have awarded the plaintiff any of its costs bespeaks latent error in this sense because, where the plaintiff proved professional misconduct upon certain particulars and the defendant had disputed that characterisation, admitting only one particular and not even accepting that there had been unsatisfactory professional conduct, no reasonable tribunal could fail to award the plaintiff at least part of its costs. It seems to me that this is the sole ground which is clearly enough demonstrated to warrant a grant of leave.
For costs purposes the fundamental feature of the outcome of the proceedings is that the plaintiff had to run its case, over the defendant's opposition, in order to satisfy the Tribunal that the defendant was guilty of professional misconduct and, thereby, to secure an order that her registration should be cancelled for the protection of the community with respect to a person whom, at least for the present, the Tribunal found not suitable to be working in health care.
It appears to me that in order to give effect to the considerations laid down by the Court of Appeal in Health Care Complaints Commission v Philipiah, I am bound to recognise that the outcome on costs in this case was unreasonable and not one at which a tribunal paying proper regard to those established considerations could arrive.
Although I do not have the same depth of appreciation of the way the case was run as the Tribunal had when it exercised its discretion at first instance, the plaintiff expressly accepted that, if leave were granted and the appeal upheld, I should exercise the discretion afresh as best I can on the materials before me rather than remit the matter to the Tribunal.
I will uphold the appeal and set aside the Tribunal's order as to costs and I will re-exercise the discretion. I will do that because the costs of this appeal are wildly disproportionate to the amount in issue, and I consider it would be wrong to inflict upon the parties the costs of returning to the Tribunal or to inflict upon the Tribunal the trouble and expense of reconvening its four members. Although the plaintiff should have an order in its favour for the costs of the proceedings in the Tribunal, on the fairest estimation I can make of the extent to which the plaintiff's allegations over-reached what it could prove and taking account of the importance of the issue of allegedly dishonest record-keeping on which the defendant successfully defended herself, those costs should be reduced by half.
Accordingly, the orders of the Court are:
1. Leave to appeal is granted.
2. The appeal is upheld.
3. Order 3 made by the Civil and Administrative Appeals Tribunal on 5 January 2018 is set aside.
4. In lieu thereof, the defendant is to pay half the plaintiff's costs of the inquiry in the Tribunal.
The relevant considerations and principles for the Tribunal in determining whether costs ought to be ordered and, if so, against whom and in what proportions are as laid down by the Court of Appeal in Health Care Complaints Commission v Philipiah. I have no reason to doubt that if the Tribunal had been cited that decision and had been asked to apply the principles stated therein, it would have done so and for the reasons I have given in this judgment the result could only have been that the plaintiff would have been awarded a portion of its costs, in the order of 50%.
Unfortunately those considerations were not placed before the Tribunal in the authoritative form in which they appear in Emmett JA's judgment. This appeal has become necessary because the relevant authority was not cited, nor the principles in it otherwise adequately drawn to the Tribunal's attention. The guidance that is already in the decided cases was not provided.
I am, therefore, not willing to grant the plaintiff its costs of this appeal, although it has been successful. I would have taken a different view if the plaintiff had referred the Tribunal to the considerations spelled out in Health Care Complaints Commission v Philipiah and if the defendant had sought to argue against the authority that decision or against what I consider to be the inevitable result of its application. The fact is that the principles just were not laid out to the Tribunal and the plaintiff is as much responsible for that as anybody. Hence, I order that the parties bear their own costs of the appeal on this summons.
[3]
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Decision last updated: 30 July 2018
Parties
Applicant/Plaintiff:
Health Care Complaints Commission
Respondent/Defendant:
Ake
Legislation Cited (1)
Civil and Administrative Appeals Tribunal Act 2013(NSW)