Health Care Complaints Commission v Litchfield

NCAT Occupational|2023-03-03

Introduction

By its submissions dated 30 January 2023 the Health Care Complaints Commission (the Commission) sought an order that Bruce Litchfield (the Practitioner) pay the Commission's costs of proceedings brought against the Practitioner by the Commission pursuant to the provisions of the Health Practitioner Regulation National Law (NSW) (National Law).
The Commission submitted that the Tribunal has power to order the Practitioner to pay costs under clause 13(1) of Schedule 5D of the National Law and may fix the amount of costs itself or order that the amount of costs be as agreed or assessed: National Law, cl 13(3A).
Clause 13 of Schedule 5D to the National Law provides the source of the power of the Tribunal to award costs. Clause 13(1) provides that the Tribunal may order a health practitioner at an "inquiry or appeal before the Tribunal" to pay the costs of another person as decided by the Tribunal. Clause 1(2) of Schedule 5D provides that a reference in Schedule 5D "however expressed" to proceedings before the Tribunal "is a reference to proceedings before the Tribunal under this law".
Section 165B of the National Law is concerned with the "constitution of the Tribunal for complaints, applications and appeals". Section 165B(5A) provides that, when constituted to make an "ancillary decision or an interlocutory decision within the meaning of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act), the Tribunal is to be constituted by the Tribunal List Manager or, relevantly for present purposes, a member who, pursuant to s 165B(2)(a) is a "senior judicial officer". Section 165(b) of the National Law defines "senior judicial officer" to include a judge of the District Court. Section 4(1)(b) of the CAT Act provides that "a decision concerning the awarding of costs" is an ancillary decision.
The Tribunal accepts that it has the power to make orders for costs pursuant to those provisions of the National Law.

The parties' contentions

The Commission submitted, at par 2 of its submissions on costs, that it was "largely successful" in the prosecution of the complaints against the Practitioner and submitted, correctly, that the Tribunal found the Practitioner guilty of professional misconduct. The Commission further submitted (at par 3) that the rejection of all but one particular of one of its Complaints was "not a matter that displaces the usual presumption that the successful party benefits from an order for its costs to be paid by the other party".
In support of its application for costs, the Commission submitted (at par 4): "a. The Court of Appeal has affirmed that costs are awarded to compensate the successful party and accepted that as a general rule, costs of proceedings before the Tribunal should follow the event; [1] b. The presumption that a successful party is entitled to receive their costs is generally only displaced where there has been some disentitling conduct by the successful party; [2] c. There was no disentitling conduct by the Commission to warrant a departure from the general rule; d. The Commission took a number of steps during the matter to minimise costs and progress the matter, including: i. appropriately inviting Dr Litchfield to serve the briefing letters to Dr Lotz and Dr Adams and their treatment records, then serving summonses to obtain those documents and mentioning Dr Litchfield's appearance at the return of summons; ii. serving Part A of its material on time and Part B soon after, and filing its material (Part A and Part B) on time; and iii. serving the proposed agreed facts and liaising with Dr Litchfield's solicitor to reach agreement and narrow the issues in dispute."
The Commission relied (at par 5) on the proceedings being heard as a combined Stage 1 and Stage 2 hearing at the request of the Practitioner and "cooperated in advancing the hearing on that basis". That was a sensible approach by the Commission, which it could reasonably have declined to take, and undoubtedly reduced the costs of the proceedings, and resulted in them being finally determined much sooner than would have been the case if there had been a two-stage hearing. It is also relevant in this context that the Practitioner remained suspended until the proceedings were finalised. His suspension would have continued for at least six months longer if the Commission had not agreed to a combined hearing of Stages 1 and 2.
The Commission relied on the Tribunal's acceptance of the propriety of the Applicant's submissions relating to possible conditions until after the Tribunal had published its reasons in respect of the Stage 1 and Stage 2 proceedings: Health Care Complaints Commission v Litchfield [2022] NSWCATOD 97 ("Litchfield").
It was submitted (at par 6) that whilst not all of the Commission's proposed conditions were accepted by the Tribunal, the Commission should not bear any adverse cost consequences for reasons including: "i. The Applicant is fulfilling a statutory responsibility to develop conditions that have the best prospect of protecting the health and safety of the public (notwithstanding the Applicant's primary position that conditions are inadequate for this purpose; ii. A number of the Applicant's proposed conditions were accepted by the Tribunal, indicating that the Tribunal was not satisfied that the conditions proposed by the Respondent were adequate."
It was further submitted (at par 7) that this was not a matter where the Tribunal would be justified in "precisely dissecting parts of the decisions in respect of which the Applicant's case was rejected. Overall, the Applicant was substantially successful, in bringing the complaint, and acted appropriately in prosecuting the facts of the complaint including cross-examining the Respondent's witnesses and the Respondent himself, and in complying with the Tribunal's direction to provide proposed conditions". On that basis, the Commission sought that the Practitioner pay its costs as agreed or assessed on a party/party basis.
The Practitioner, by his submissions of 15 February 2023, resisted the Commission's application and submitted that the appropriate order was that the Commission be awarded 60% of its costs as agreed or assessed on a party/party basis. The Tribunal must exercise its discretion judicially, and is not necessarily bound by the parties' competing positions. Arguably, for practical purposes the issue is apparently whether, as the Commission seeks, it should be awarded all of its costs of the proceedings on a party/party basis or, as the Practitioner seeks, should be awarded 60% of those costs on that basis.
The Practitioner accepted, at par 2 of his submissions, that costs normally follow the event in this jurisdiction, citing Qasim v Health Care Complaints Commission [2015] NSWCA 282. The Practitioner relied upon the judgment of Emmett JA in Health Care Complaints Commission v Philipiah [2013] NSWCA 342 ("Philipiah") at [42]-[44], which was submitted to confirm that the broad principle was "subject to discretionary qualifications".
In Philipiah at [43], having stated the general rule, Emmett JA referred to "factors that might militate against the recovery by the Commission of all of its costs in particular proceedings". One of the factors to which His Honour referred was "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".
The Practitioner also referred (at par 3) to the statement by Brereton J (as Brereton JA then was) in Waterman v Gerling Australia Insurance Co Pty Limited (No 2) (Costs) [2005] NSWSC 1111 where His Honour said, at [10], that "[a] successful plaintiff who has failed on certain issues may be deprived of costs on those issues, or even ordered to pay the defendant's costs of them", although that course was "one on which the court embarks with hesitancy". His Honour considered that the authorities to which he referred revealed "consistent themes", including that it "may be appropriate to award costs of a separate issue where a clearly definable and severable issue, on which the otherwise successful party failed, has occupied a significant part of the trial".
The Practitioner submitted (at par 4) that "when there are multiple issues litigated, a court may, in the exercise of its discretion, order that a successful party have part only of its costs", particularly if "the matters upon which that party is unsuccessful took up a significant part of the trial, either by way of evidence or argument": Sabah Yazgi v Permanent Custodians Ltd (No 2) [2007] NSWCA 306 at [24].
The Practitioner further referred (at par 5) to the judgment of Hodgson JA in Commonwealth of Australia v Gretton [2008] NSWCA 117 ("Gretton") in which His Honour observed that the "idea" was that costs "should be paid in a way that is fair, having regard to what the Court considers to be the responsibility of each party for the incurring of the costs".
The Practitioner took issue (at par 6) with the Commission's reliance upon the decision in Oshlack v Richmond City Council (1998) 193 CLR 72; [1998] HCA 11 and cited [40] of the High Court's judgment where it was said that: "There is no absolute rule with respect to the exercise of the power conferred by a provision such as s 69 of the [Land and Environment Court Act 1979 (NSW)] that, in the absence of disentitling conduct, a successful party is to be compensated by the unsuccessful party. Nor is there any rule that there is no jurisdiction to order a successful party to bear the costs of the unsuccessful party".
The crux of the Practitioner's case for a partial costs order was that, in circumstances where multiple issues had been litigated and where the Applicant failed to establish part of its case, "including on clearly definable and severable issues", a partial costs order could appropriately be made.
In support of his contention that a partial costs order was appropriate, the Practitioner submitted (at par 8) that the hearing proceeded "on the basis that the Respondent made several admissions of unsatisfactory professional conduct, and only limited time was spent in cross-examination of the Respondent on this aspect, and very little time at all was spent testing the patient's recollection or on otherwise testing aspects of the Applicant's case".
The Practitioner referred (at par 9) to the Commission's conduct of its case which was submitted, at least inferentially, to have prolonged the proceedings. The Tribunal does not make a finding in those or similar terms. The Commission conducted its case with the thoroughness which the issues for determination required. The Practitioner also relied (at par 10) on the controversy during the hearing with respect to the Commission's "disputed Part B material" in relation to Stage 1 of the proceedings, and (at par 11) the Tribunal's reasons (in Litchfield at [123]) for not accepting the Part B material at Stage 1 of the proceedings. Although partially unsuccessful in that regard, the Tribunal does not criticise the Commission's persistence with the less than straightforward issue of the tender of disputed Part B material.
It was further submitted (at par 13) that the Commission had sought cancellation of the Practitioner's registration with a period of non-review of 5 years, an issue with respect to which it was unsuccessful. The Practitioner also relied on the Commission's asserted failure to secure, in the alternative, conditions attaching to the Respondent's registration sought by it (at pars 14-15). The Practitioner also relied significantly (at par 18) on the Commission's failure to prove Complaint 5 (competence to practise).
For the foregoing reasons, the Practitioner submitted (at par 21) that the Commission had been unsuccessful with respect to a "clearly definable and severable issue" which "occupied a significant part of the hearing, both in submissions and evidence". The fact that the Commission persisted with Complaint 5, despite the asserted lack of support for it from the Commission's own expert, was also relied upon in support of the Practitioner's contentions.
On 2 March 2023, the Commission filed submissions in reply to the Practitioner's submissions. Under the heading "The exercise of discretion", the Commission submitted (at par 2) that the Practitioner's case was that the Tribunal "ought to exercise its discretion to displace the presumption that the successful applicant is entitled to receive their costs". It was submitted, correctly in the Tribunal's view, that, if enlivened, the presumption will "generally" only be displaced when there has been "disentitling conduct" and that it was for the "losing party" to establish a basis for departing from the rule: Patrech v Psychology Board of Australia (No 2) [2023] NSWCATOD 9. To the extent that the Practitioner may rely on "disentitling conduct" by the Commission, such reliance is unfounded.
The Commission submitted (at par 4) that the decisions of the Court of Appeal in Allianz Australia Insurance Ltd v Rawson Homes Pty Ltd (No 2) [2021] NSWCA 334 and Oikos Constructions Pty Ltd (t/as Lars Fischer Construction) v Ostin & Anor (No 2) [2021] NSWCA 98 established that: "Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. 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 between those particular issues on which it was successful and those on which it failed. … it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument …. Whether an order contrary to the general rule should be made depends on "the circumstances of the case viewed against the wide discretionary powers of the court which powers should be liberally construed"; A separable issue can relate to 'any disputed question of fact or law' before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter. Where there is a mixed outcome, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of discretion being dependent upon matters of impression and evaluation."
The Commission referred (at par 5) to the statement from Philipiah, at [45], that 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".
In reliance upon that statement, the Commission submitted (at par 6), correctly, that the practitioner "chose to contest aspects of the complaint brought against him, and was largely unsuccessful" and, also correctly, that on the "key issue" of whether the practitioner's offending conduct amounted to professional misconduct, the Practitioner failed. It is not in doubt that, in terms of the Stage 1 proceedings, the Commission was successful, and, although making a number of admissions, the Practitioner was unsuccessful with respect to the issue which he vigorously contested, that being whether his largely admitted offending conduct constituted professional misconduct.
The Commission submitted (at par 7) that the basis of the proportional costs order sought by the Practitioner was not apparent. The Commission further submitted (at par 9) that there was "no warrant to embark upon a process of determining separate issues for the purposes of costs given the overarching success of the Commission".
The Commission further submitted (at par 10) that the "fact that the Commission was unsuccessful in Complaint 5 is not sufficient to justify a departure from the general principle". If that were the only measure of the Practitioner's success, the Tribunal would agree with that contention. As will be seen, the exercise of discretion in this case involves a consideration of the broader issues which, at least in part, are considered to be referable to the sensible decision of the parties to combine the Stage 1 and Stage 2 hearings, and the ultimate outcome of the proceedings.
With respect to the disputed "Part B documents" in the Stage 1 hearing, the Commission referred (at par 12) to the findings of the Tribunal, and to the Part B documents which were received in evidence and submitted (at par 13), correctly in the Tribunal's view, that the "admissibility of the Part B documents was neither clearly determined in the Respondent's favour, nor was it a separable issue that would support any reduction" in the costs payable by the Practitioner to the Commission.
It is unnecessary to refer in detail to the course of the hearing over nine days for present purposes, save to record that, in the Tribunal's view, and particularly having regard to the potentially problematic nature of the hearing, combining as it did both Stage 1 and Stage 2 proceedings, irrespective of success or its absence with respect to particular disputed issues of fact, each party conducted the proceedings in an efficient, competent and appropriate manner.
It was submitted (at par 16), accurately in the Tribunal's view, that the Practitioner had "failed to articulate" the conduct of the Commission which may be "disentitling". The Tribunal does not find there to have been disentitling conduct on the part of the Commission. Similarly, to the extent that any reduction in the costs payable by the Practitioner to the Commission raises questions of disentitling conduct, if, on other grounds, some reduction in the costs properly payable by the Practitioner to the Commission were appropriate, nothing done by or on behalf of the Practitioner during the proceedings would constitute disentitling conduct.
The Tribunal accepts the submission on behalf of the Commission that because submissions "are not accepted does not amount to any dereliction of the Commission in its duty to the Tribunal and does not amount to conduct which supports a reduction in the Commission's costs award given its overall success in the proceedings".
As will be seen, in the Tribunal's view, the exercise of discretion in this case turns on whether, as the Commission submits, it achieved "overall success in the proceedings", or whether, as the Practitioner submits, although the Commission was overwhelmingly successful in the Stage 1 proceedings, he achieved a significant victory in the Stage 2 proceedings, in that, despite the vigorous, and entirely appropriate opposition of the Commission to his doing so, the Practitioner retained his registration, albeit on conditions which were not only onerous, but even more onerous than the Practitioner invited the Commission to impose.
The Commission submitted (at par 20) that the basis upon which the 40% reduction in its costs was advanced was "opaque". The Tribunal struggles with that contention. The authorities to which both parties referred make clear that a minute dissection of success or failure with respect to particular issues requiring determination in the proceedings is discouraged when proportional costs orders are sought. Although not unfettered, and to be exercised judicially, the discretion of the Tribunal with respect to costs is broad, and, ultimately, informed by the justice of the case.
As will be seen, the Commission raised (at par 21) an issue which the Tribunal considers to be of significance. Although the intention of the Commission's submission may not have been to this effect, the Tribunal interprets the Commission's contention as being, put bluntly, that the dispute is ultimately whether, as the Commission contends, it should be awarded all of its costs, or, as the Practitioner submits, only 60% of those costs, and that, neither party having raised, or made submissions with respect to any other outcome, the Tribunal should opt for one outcome or the other.

Consideration

The Tribunal accepts that the usual rule which emerges from the authorities to which both parties referred is that costs "follow the event" and that a successful party is entitled to costs unless disentitling conduct is established. The Tribunal has a discretion which is not unfettered and must be exercised judicially.
Neither party's entitlement to costs, or a reduction in the costs payable is impeded by disentitling conduct. As the Tribunal's decisions in the substantive proceedings confirm, the case was keenly but fairly, expeditiously and proportionately prosecuted and defended by experienced and highly competent Counsel for both parties. Irrespective of the measure of success or otherwise, nothing to which the Tribunal has been referred suggests that either party acted unreasonably throughout the proceedings. The real issue is whether, as the Practitioner contends, the factors relied upon by him in his submissions warrant the making of a partial costs order and, if so, what that partial costs order should be.
Although the Tribunal is not constrained by the competing positions of the parties, without inviting them to be further heard in support of, or in opposition to, such a course, the Tribunal considers that it would be procedurally unfair to consider any outcome other than those for which the parties contend. The only options canvassed by the parties in their submissions were an order for 100% of its costs by the Commission, and an order that the Commission be awarded 60% of its costs (by the Practitioner). Neither party invited the Commission to make any other apportionment of costs in the alternative or otherwise.
In BHP Billiton Iron Ore Pty Ltd v National Competition Council (No 2) [2007] FCA 557 at [27], Middleton J observed that: "Where the Court is considering the question of costs in respect of a lost distinct or severable issue or inquiry, which can clearly be treated as distinct and severable, then to determine whether the successful party will lose some or all of its costs, it will be necessary to consider and weigh up case management principles, the significance of the issue or inquiry in proportion of the proceedings as a whole, and whether the issue or inquiry had any relative strength or merit; …."
In Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304, the general approach of overall success, rather than a consideration of success or failure with respect to individual issues when determining a costs application was endorsed by the Court of Appeal. In Avopiling Pty Limited v Bosevski [2018] NSWCA 146 at [172]-[173], the Court of Appeal endorsed the evaluation of success or failure in litigation by reference to the "practical result of a particular claim".
In Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53; (2015) 327 ALR 192, French CJ, Kiefel, Nettle and Gordon JJ observed (at [6]) that the "preferable approach" with respect to costs should apply when "it may [not] be said that the event of success is contestable, by reference to how separate issues have been determined" unless there were "special circumstances to warrant a departure from the general rule". Their Honours suggested that there were "good reasons not to encourage applications regarding costs on an issue-by-issue basis, involving apportionments based on degrees of difficulty of issues, time taken to argue them and the like".
The Tribunal accepts that the Commission "failed to establish all of the particulars of professional misconduct alleged" (Philipiah at [43]) and takes those matters into consideration. As recorded earlier, relative to its overall success at Stage 1, the Commission's failure to establish Complaint 5 would not incline the Tribunal to reduce the costs which it would otherwise be awarded.
Having regard to the manner in which the proceedings were conducted, which was, in difficult circumstances for both parties, sensible and as expeditious as was realistically possible, there is a degree of artificiality in focusing upon the absence of success with one particular where the Commission was successful with other and more significant complaints. Determining "overall success" in these proceedings is not simple or straightforward, as the Tribunal's reasons in its two earlier decisions confirms.
As is not in doubt, there was a considerable overlap between evidence which was relevant at Stage 1 and Stage 2 of the proceedings. Although superficially attractive, focusing on the outcome of particular issues, rather than on whether the evidence with respect to it was separate and distinct from the evidentiary matrix in which the particulars of the Commission's claim were determined, is unhelpful in the circumstances of this case. Identifying evidence which was only relevant to any particular issue in this case, if possible, requires very close "dissection" of the course of the hearing, and results in an outcome which involves a considerable measure of artificiality.
The Commission was overwhelmingly successful at Stage 1. Superficially, given the Commission's vigorous, and entirely appropriate resistance to the Practitioner's attempts to retain his registration, the Practitioner was partially and materially successful with respect to the ultimate outcome of the proceedings. Having regard to the terms and conditions on which that was arguably so, the Tribunal does not consider that the success of the Practitioner at Stage 2 equates, or nearly equates, with the success of the Commission at Stage 1. It is significant that the Practitioner only retained his registration subject to very onerous conditions which, although falling short of those sought by the Commission, were materially more onerous than those which the Respondent invited the Tribunal to impose.
The statement by Hodgson JA in Gretton, to which the Practitioner referred, that costs "should be paid in a way that is fair, having regard to what the Court considers to be the responsibility of each party for the incurring of the costs" resonates in the present circumstances.
The concept of "overall success" in protective proceedings of this kind is potentially somewhat different to that in private litigation which does not have the public interest aspect which, as s 3B of the National Law makes clear, is "paramount" in the exercise of the Tribunal's jurisdiction pursuant to the National Law.
Objectively, the Commission was successful "overall" with the Stage 1 determination. It could be said that neither party was successful on an overall basis at Stage 2. Superficially, the Commission was unsuccessful in not securing an order for cancellation of the Practitioner's registration, and the Practitioner was successful in that respect. Conversely, the conditions which were ultimately imposed on his registration, in response to the Commission's submissions in that regard, were materially more onerous than were the conditions which the Practitioner offered.
In the circumstances, although not wholly successful, the Commission achieved a substantially greater measure of overall success in the proceedings than did the Practitioner. Moreover, when regard is had to the paramount considerations which apply to every aspect of these proceedings, the Commission can be seen to have achieved overall success in a practical sense. Albeit short of cancellation, the Commission has succeeded in the Practitioner being subject to the very onerous suite of conditions attaching to the Practitioner's registration in order to adequately protect the health and safety of the public. In the Tribunal's view, discounting the Commission's entitlement to costs by 40% does not properly reflect the extent to which the Practitioner was successful on an overall basis.
It would be regrettable if, in circumstances such as the present, which are the only circumstances with which the Tribunal is currently concerned, the Commission were to be penalised because, in the discharge of its obligations pursuant to the National Law, it failed to secure cancellation of the Practitioner's registration when it secured such onerous conditions with respect to the Practitioner's registration.
As recorded earlier, the Commission did not need to agree to a combined hearing of these proceedings. On balance, doing so was potentially more tactically, financially and practically advantageous to the Practitioner than to the Commission. It is "fair" that the Commission's agreement to a combined hearing is taken into account in its favour.
As is not in doubt from the Tribunal's reasons, the very onerous conditions attached to the Practitioner's registration were the result of the Commission's submissions, and the evidence which it elicited during the course of the hearing. That included, and was informed by evidence with respect to contested issues which did not result in findings in its favour. Other than by descending into the kind of minute dissection of the proceedings which the authorities discourage, and, realistically, as the Commission submits, being ultimately unable to discern why a 40% discount on the Commission's fees is appropriate, the Tribunal considers that the appropriate order is that the Practitioner pay the Commission's costs as agreed or assessed. Properly, there is no suggestion that the discretion to award indemnity costs should be enlivened. The order for costs will be on the usual basis.

Orders 1. The Respondent pay the Applicant's costs of and incidental to the proceedings as agreed or assessed on a party and party basis.

Endnotes

Health Care Complaints Commission v Philipiah [2013] NSWCA 342 at [42]-[46].
Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [40]; Health Care Complaints Commission v CSM [2016] NSWCATOD 125 at [98]; Health Care Complaints Commission v Brush (No. 2) [2015] NSWCATOD 154 at [9]. 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: 04 April 2023

Environment Court Act 1979(NSW)

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Judgment (5 paragraphs)

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Legislation Cited (2)

Cases Cited (18)

Cited By (6)