Health Care Complaints Commission v Milanovic

1. The HCCC filed no (additional) evidence to be considered on the question of costs, but the Respondent relies, for its arguments on costs, on an affidavit from her solicitor, Sara Wallace, affirmed on 6 February 2025.
2. Ms Wallace recounts the history of these proceedings, highlighting:

(a) The original HCCC application dated 4 October 2023, making four complaints against Dr Milanovic:

(1) That she pleaded guilty to, and was convicted of, the offence of "obtain financial advantage by deception" (par 5);

(2) That she was guilty of "unsatisfactory professional conduct" in respect of 25 patients, in respect of whom she obtained "payment from Medicare for services [that she] did not provide" - see Schedule B (par 6);

(3) That she was guilty of "unsatisfactory professional conduct" in respect of some 20 patients, in respect of whom she "created false and/or misleading medical records", contrary to relevant "Good Medical Practice" guidelines - see Schedule A (par 7);

(4) That Complaints Two and Three "individually and cumulatively" amount to "professional misconduct" namely conduct sufficiently serious to justify suspension or cancellation of her registration (par 8).

(b) The Tribunal's directions of 27 October 2023, including listing the matter for a three-day hearing, commencing on 8 April 2024 (par 12);

(c) The five volumes of material served by the HCCC, in respect of which Ms Wallace complains (pars 16-17) "most of the records... did not appear to be the subject of the complaint" (pars 13-17);

(d) The extent of work undertaken on behalf of the Respondent in November/December 2023 and January/February 2024, in response to material served, but not referred to in the 2023 complaint (pars 18-27);

(e) Vacation of the April hearing dates, setting down of the hearing on 1 October 2024, and making further directions on 1 March 2024 (par 30);

(f) The extent of work undertaken on behalf of the Respondent in March/April/May 2024, in further response to disputed materials (pars 31-41);

(g) The extent of work undertaken on behalf of the Respondent in June/July 2024, in response to revised HCCC materials (pars 42-43);

(h) The advice to the Respondent's solicitors on 6 August 2024 that the HCCC would be striking out Complaints Two and Four and limiting the scope of Complaint Three. The HCCC provided a copy of its intended Amended Application of 12 August 2024, and a list of documents to which Complaint Three now related (pars 44-48).

"49. As detailed above, my firm obtained detailed instructions from Dr Milanovic in relation to every consultation listed in Schedule B of the 2023 Complaint. Further, my firm also considered and obtained instructions from Dr Milanovic with respect to the medical records served by the HCCC in November 2023 but not referred to in the 2023 complaint. The HCCC withdrew its allegations relating to the consultations listed in Schedule B of the 2023 Complaint and withdrew its reliance on medical records served in support of 2023 Complaint. Extensive costs that were incurred by my firm seeking instructions with respect to aspects of the complaint withdrawn by the HCCC - that is, the work completed was not required.

50. I estimate that the costs associated with this work would have been in the vicinity of approximately $65,000 to $75,000.

Dr Milanovic's Change in Circumstances

51. On 14 August 2024, my firm wrote to the HCCC to advise that Dr Milanov had instructed Makinson d'Apice Lawyers:

a. that she was leaving Australia due to a family emergency overseas;

b. that she would still be in Europe attending to her family situation when the hearing scheduled (sic); and

c. that she would not be renewing her registration in September 2024.

52. Dr Milanovic subsequently surrendered her registration.

53. On 24 September 2024, on behalf of Dr Milanovic, we filed an application for the termination of the proceedings along with an affidavit affirmed by the deponent.

54. On 26 September 2024, I received a letter from the HCCC enclosing additional documents upon which they proposed to rely upon (sic)...

55. On 30 September 2024, I received a letter from the HCCC enclosing a Further Amended Application for Disciplinary Findings in light of Dr Milanovic surrendering her registration..."

1. Ms Wallace's affidavit goes on to record (par 56) the "Tribunal's orders of 29 November 2024", and (pars 57-63) her actions in respect of the costs dispute, especially in regard to "the Respondent's costs thrown away by the amendment" to the 2023 complaint (see Annexure "T" to the affidavit): on 5 December 2024, Ms Wallace offered that Dr Milanovic would "agree to pay the Commission's costs of the proceedings generally but seeks costs thrown away by the late amendment ([namely]... withdrawal of Complaints 2 and 4 in August 2024)" ("T", p 9).
2. However, the HCCC preferred that the parties exchange detailed submissions on costs. In an email on 13 December 2024 ("T", pp 6-7) the Commission said to Ms Wallace:

"Given the Commission was successful, it is entitled to its costs. Dr Milanovic bears the onus of establishing that a different costs order should be made. In this regard, it is not sufficient that the Commission made a forensic decision not to press certain complaints.

While the Commission withdrew complaints 2 and 4, it is not apparent what costs, if any, would have been incurred by Dr Milanovic in circumstances where:

1. Dr Milanovic did not serve any statement in the proceedings. Her evidence was limited to a short affidavit of Ms Wallace dated 23 September 2024.

2. She made an application to terminate the inquiry and therefore her primary position was not to contest the proceedings in substance.

3. Further, and in any event, Complaint 4 relied on the particulars to earlier complaints and did not require further evidence.

We request that Dr Milanovic provide particulars of the costs incurred, such as a description of the work that was performed in relation to Complaints 2 and 4 and the periods during which that work was performed. If Dr Milanovic maintains that work was performed on an ongoing basis during the period October 2023 to August 2024, please provide an adequate description of that ongoing work.

If adequate particulars are provided by 18 December 2024, we will seek instructions in respect of an order that apportions costs.

In the absence of adequate particulars being provided:

1. the Commission does not agree that, as the successful party, it should pay any of Dr Milanovic's costs; and

2. we note that Dr Milanovic has declined the Commission's proposal to have timetabling orders made and seeks to make submissions in accordance with order 7 of the Tribunal's orders. In those circumstances, the Commission will also file submissions in accordance with those orders. For the avoidance of doubt, we note there are no orders for the parties to file further evidence and the Commission will oppose Dr Milanovic relying on further evidence in relation to the question of costs without an order of the Tribunal."

1. Ms Wallace responded later that day ("T", pp 5-6):

"Between October 2023 and August 2024, broadly, the following work was performed:

1. Review of complaint 2 and complaint 4.

2. Review of all records relating to these complaints in HCCC's evidence.

3. Providing advice with respect to complaints 2 and 4 (including schedule B and evidence served by HCCC relevant to schedule B).

4. Corresponding with Commission re issues with evidence served re complaint 2/schedule B (including directions hearing where issues re complaint 2 were ventilated and the nature of the work involved by my client to respond to schedule B).

5. Obtaining instructions from our client with respect to all billings/ consultations in Schedule B/complaint 2.

6. Obtaining instructions from our client with respect to all records in the HCCC's evidence relating to schedule B/complaint 2.

7. Preliminary steps to obtain expert evidence with respect to consultations in Schedule B.

Please note that Dr Milanovic was preparing to serve evidence in response to the complaints with a view to maintaining her registration. It was only in August that Dr Milanovic made the decision to surrender her registration and not serve evidence (including a statement and expert evidence with respect to patients in schedule B).

The actual costs of above are largely irrelevant to the Commissions (sic) consideration of the issue.

In short, the Commission levelled two complaints against Dr Milanovic and served a schedule of billings and eight volumes of material in support of the same. We sought instructions from our client in response to these complaints and the material served. The Commission withdrew these complaints. Dr Milanovic is plainly entitled to the costs thrown away by this. i.e. expenses were unnecessarily incurred by our client to respond to an aspect of the case that was not pursued by the Commission."

1. On 17 December 2024, the HCCC ("T", p 4) confirmed that it would not agree to pay the Respondent's costs in relation to Complaints 2 and 4, but was prepared "to not press costs incurred by [it]... in relation to work performed to advance Complaints 2 and 4".
2. On 18 December 2024, Ms Wallace ("T", p 3) confirmed that Dr Milanovic intended to press the issue of her costs arising from the amendment to the HCCC application for protective orders.

1. Opposing counsel are agreed on the governing principles to be applied in determining the question of costs.
2. As noted by Mr Britt, in his submissions in chief on behalf of the Respondent (par 3), any order for costs must do justice as between the parties in the case at hand.
3. While the Tribunal's discretion is unfettered, it must be exercised judicially, and costs generally "follow the event", but are intended to compensate a successful party, not penalise an unsuccessful party.
4. The onus is on the losing party to establish a basis for departing from the usual rule, namely to establish "some disentitling conduct", possibly oppressive conduct, on the part of the successful party: see Health Care Complaints Commission v Philipiah [2013] NSWCA 342, notably per Emmett JA, at [42].
5. Only in exceptional circumstance will a successful party be deprived of costs and ordered to pay the opponent's costs. The discretion to apportion costs between the parties will be exercised only in limited circumstances: see Health Care Complaints Commission v Hasan (Costs) [2022] NSWCATOD 69, at [27].
6. In Moseley v AB (No 2) [2017] NSWSC 1812, Walton J noted (at [71]) that: "The disentitling conduct does not need to amount to misconduct; it may simply be any conduct 'calculated to occasion unnecessary expense'."

1. The Respondent relies on the decision in Moseley, on the basis that the amendment to the HCCC case came "late in the preparation of the hearing", causing "unnecessary expense" to the Respondent (submissions, par 13). The delay is submitted to be "unreasonable", as the Respondent put the Commission on notice of "issues with" the Commission's documents from as early as February 2024, and the Commission sought to amend its brief, rather than the complaint, while the Respondent remained under an obligation to file her evidence. The date of the shift in the HCCC case, 6 August 2024, was after the date by which the Respondent was required to file her evidence.
2. The Respondent relies upon the principles in Fraser v Health Care Complaints Commission [2015] NSWCA 421, to argue that (submissions, par 17):

"... The necessity of the Respondent having to meet up until the beginning of August 2024 the additional complaints and a multitude of particulars and sub-particulars adds a level of unwarranted complexity, which, in our submission, adds to the burden of costs on a respondent in prosecutions of this kind. As that burden will inevitably fall on the respondent except in very rare cases, there is an important public interest in giving careful consideration to the amount of costs incurred. The exercise of discretion in the Tribunal in assessing costs is an important safeguard against the creeping escalation of costs."

(see also Health Care Complaints Commission v Goyer (No 2) [2019] NSWCATOD 195, at [85] and [89]).

1. The Respondent invites the Tribunal to infer that there may never have been any proper basis for Complaints 2 and 4, and the broader Complaint 3, to be included in the HCCC application (par 18), and the six month delay in the HCCC responding to the issues raised by the Respondent has not been explained (par 22).
2. Hence, the Respondent submits, she is entitled to her "costs thrown away in preparing to defend [those] parts of the original complaint" (par 23), and she should not be ordered to pay the Commission's costs "associated with the original complaint and its [substantial] amendment" (par 24).
3. In the alternative, the Respondent says, the Commission's conduct is such that its costs of the proceedings should be reduced by a "similar quantum of those thrown away by the Respondent" (par 25).
4. Finally, the Respondent submits that she should be entitled to recover her costs of her application for costs, by reason of the behaviour evidenced in paragraphs 57-63 of the Wallace affidavit (par 26 - and see [11] above).

1. The HCCC submits that the focus should be on a party's "overall success" - see Health Care Complaints Commission v Litchfield (No 3) (Costs) [2023] NSWCATOD 44, at [40]-[53] - and that, given its "overall success" in the proceedings, it should be awarded its costs, except in relation to the two withdrawn complaints.
2. It also notes that such an outcome was proposed to the Respondent on 17 December 2024 (see [12] above, and Annexure "T", p 4), before she made the present application for costs, and that the amendments to the complaint were notified to the Respondent approximately two months before the hearing, and, therefore, not "at a late stage".
3. The HCCC submissions say (pars 4,5 and 6):

"4. The respondent's arguments should be rejected. It is only in very exceptional circumstances that a successful party would be deprived of its costs and also ordered to pay the unsuccessful party's costs. In the present, such exceptional circumstances are not demonstrated. As outlined below, the Commission provided adequate notice to the respondent of its decision not to press certain complaints. Neither that decision nor its timing was unreasonable. It was open to the Commission to assess, based on practical considerations, whether or not to press each complaint, provided the respondent was given adequate notice.

5. In any event, it is apparent from the course taken by the respondent that the Commission's amendments did not result in any change to the defensive strategy adopted by the respondent nor in the steps taken to execute that strategy. The respondent incurred costs in relation to the preparation of evidence which appears, on its face, to relate to the Commission's complaints more broadly. Yet, she elected not to provide any statement, including as to insight and contrition, and did not serve any expert evidence. Rather, she sought to terminate the inquiry and otherwise took issue with whether certain orders were available under the [National Law].

6. It is apparent that the respondent's forensic decision-making was influenced by the change in her circumstances, which relevantly included her decision to leave Australia and not renew her registration. There is no reason to consider that her position would have been different if Complaints Two and Four had not been withdrawn by the Commission or if additional notice had been given to her."

1. Those submissions go on to say (par 7) that the Wallace affidavit:

"...does not adequately explain the change in the respondent's circumstances and why she chose not to advance a positive evidentiary case. It is more likely than not that the costs incurred by the respondent were wasted because the respondent's circumstances had changed rather than because of any amendments made by the Commission to its Complaint".

1. As at the changes in the case in mid-August 2024, the Respondent had not filed and served a Reply or any evidence. Her Reply was served on or around 11 September 2024, and on 12 September 2024, the Respondent indicated by email that no other material would be served (par 14). On 24 September 2024, the Respondent served an application to terminate, supported by an affidavit from Ms Wallace (see Reasons at [6] and [13]).
2. The Respondent did not give evidence at, nor did she attend the hearing, eg, by AVL; nor did she serve any expert evidence, which could have been just as relevant to Complaints One and Three as to Complaint Two. Her case adopted a strategy of defending on legal issues only.
3. The HCCC, firstly (par 19) denies acting with any unreasonable delay in withdrawing the two complaints, and "providing further details in relation to Complaint Three", and submits (par 20) that the Respondent did not "raise any issue with the formulation or appropriateness of Complaints Two and Four", but "merely raised issues in relation to the completeness of the records served by the Commission and proposed extensions of time to deal with the records". The HCCC submissions rely upon materials included in the Wallace affidavit to support this case, and go on to say (par 21):

"As discussed above, the matters raised by the respondent did not suggest any reason for the Commission to withdraw complaints Two and Four. Further, there is no adequate basis to infer that the Commission had no proper basis to make the complaints in the first place... Having assessed the practical steps involved in running the hearing, the Commission made a decision not to maintain Complaints Two and Four, and notified the respondent of that decision with ample notice ahead of the hearing of the matter. That did not constitute disentitling conduct in the manner contemplated by the authorities".

1. Secondly, the Commission argues (par 22-26) that its amendments "would not have resulted in any change in the forensic decisions made by the respondent".
2. Thirdly, the Commission submits (pars 27-32) that the Respondent has not demonstrated that she reasonably incurred costs in relation to Complaints Two and Four, costs which were thrown away by reason of the withdrawal of those complaints.
3. The Commission's submissions analyse (in pars 29-31) Ms Wallace's claims in respect of particular work, and assert (par 30) that it "appears referrable to the 'HCCC case' generally, rather than being referrable to the withdrawn complaints". The Commission concludes (par 32):

"It is telling that no expert evidence was ultimately served. That is consistent with the respondent's strategy to defend the proceedings based on legal issues once her circumstances had changed and she had determined not to attend the hearing or serve substantial evidence".

1. The fourth argument raised by the HCCC is that the estimate of the costs of work thrown away ($65,000 to $75,000) is "not reasonable" and (par 33):

"...does not represent an appropriate sum in circumstances where she ultimately adopted a strategy of not serving any evidence other than a solicitor's affidavit following a change in her circumstances. As discussed above, there is no adequate basis to conclude that the position would have been different if the Commission had not withdrawn Complaints Two and Four."

"...the Tribunal should not accept the position advanced by the respondent. As the successful party, the Commission should be awarded its costs of the proceedings, including in respect of the application for costs. The Commission accepts that it should not be awarded costs it incurred with respect to Complaints Two and Four which were withdrawn".

1. Over objection, the Tribunal granted the Respondent leave to file written submissions in reply to those made by the HCCC.
2. The Respondent's reply submission curiously remarks (par 3):

"...the issue before the Tribunal is not how close to the hearing the amendment was made but how late in the preparation of the hearing the Complaint was finally made by the Respondent where considerable work undertaken by the Respondent and her solicitors in preparing to defend complaints 2 and 4".

1. The Respondent complains that on 6 August 2024 the HCCC provided no basis for its amendment of the Complaint, and now has given no evidence as to its reasons (pars 13-15). She attacks the HCCC submissions at paragraphs 4, 5, 6 and 7 set out in full at [30] and [31] above, as "devoid of merit" and lacking in evidentiary support.

1. Resolution of the dispute on costs in this matter ultimately requires an assessment as to whether the successful party (undoubtedly, in this case, the HCCC) has been guilty of any "disentitling conduct" causing the unsuccessful party's costs to be increased in a way, or to an extent, which should be considered unreasonable.
2. The onus of establishing such conduct rests on the Respondent (Health Care Complaints Commission v Balafas (No 2) [2021] NSWCATOD 175).
3. The Respondent has failed to discharge this onus, and the Tribunal accepts in full the submissions of the Applicant on the question of costs.
4. The Respondent's conduct of her defence of these proceedings, which is entirely a decision for her and her advisers to take, was reflected in their outcome, and that outcome should flow into the usual order for costs against her. She has not established any disentitling conduct on the Commission's part, as envisaged by the relevant authorities (eg, no HCCC behaviour has been shown to have been "calculated to occasion unnecessary expense" - see [21] above).
5. The Commission correctly accepts that it should not recover the costs it incurred in respect of the two withdrawn complaints, and no basis has been established for the Tribunal to award the Respondent any costs in respect of those complaints or their withdrawal.
6. Given that the Tribunal has arrived at a decision completely in line with a proposition that the Commission put to the Respondent on 17 December 2024 (Wallace affidavit, Annexure "T", p 4, Pritchard email sent at 3.56pm), the Commission should also recover its costs of this costs application.

1. The Tribunal, therefore, makes the following order:

(1) Under s 50(2) of the Civil and Administrative Tribunal Act 2013, the Tribunal dispenses with a hearing with respect to the costs issue.

(2) The Respondent is ordered to pay the Applicant's costs of these proceedings, as agreed, or assessed according to law, excluding costs it incurred in respect of Complaints Two and Four, but including its costs on the dispute as to its request for the Respondent to pay its costs.

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.