Health Care Complaints Commission v Litchfield

The parties' contentions

1. 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".
2. 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."
3. 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.
4. 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").
5. 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."
6. 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.
7. 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.
8. 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".
9. 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".
10. 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".
11. 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].
12. 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".
13. 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".
14. 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.
15. 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".
16. 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.
17. 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).
18. 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.
19. 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.
20. 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."
21. 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".
22. 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.
23. 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".
24. 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.
25. 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.
26. 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.
27. 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.
28. 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".
29. 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.
30. 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.
31. 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.