The issue in these proceedings is whether the Tribunal should make a costs order and if so, in what amount. The Health Care Complaints Commission (the Commission) brough proceedings against Mr Morsingh. In decision the stage one decision we found that Mr Morsingh had engaged in "unsatisfactory professional conduct" as defined in the Health Practitioner Regulation National Law (NSW) (the National Law): Health Care Complaints Commission v Morsingh [2023] NSWCATOD 118. In the stage two decision we found that Mr Morsingh's conduct does not amount to "professional misconduct". We also ordered that Mr Morsingh complete an educational course on prescribing so called Schedule 8 and Schedule 4D medications and that he not be registered as a medical practitioner until he has done so: Health Care Complaints Commission v Morsingh [2023] NSWCATOD 161.
The Commission seeks an order that Mr Morsingh pay 50% of its costs, or in the alternative, an order that each party pay their own costs. Mr Morsingh seeks an order that the Commission pay his costs "albeit with a small discount of say 10%" to account for the Commission having some minor success.
[2]
Legal principles
The Tribunal's power to award costs in these kinds of proceedings is set out in Clause 13 to Schedule 5 of the National Law:
13 Tribunal may award costs [NSW]
(1) The Tribunal may order the complainant (if any), the registered health practitioner or student concerned, or any other person entitled to appear (whether as of right or because leave to appear has been granted) at an inquiry or appeal before the Tribunal to pay costs to another person as decided by the Tribunal.
(2) When an order for costs has taken effect, the Tribunal is, on application by the person to whom the costs have been awarded, to issue a certificate setting out the terms of the order and stating that the order has taken effect.
(3) The person in whose favour costs are awarded may file the certificate in the District Court, together with an affidavit by the person as to the amount of the costs unpaid, and the Registrar of the District Court must enter judgment for the amount unpaid together with any fees paid for filing the certificate.
(3A) The Tribunal may fix the amount of costs itself or order that the amount of costs be assessed by a costs assessor under the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis.
(4) This clause applies instead of section 60 (Costs) of the Civil and Administrative Tribunal Act 2013.
This provision gives the Tribunal a discretionary power to make a costs order: Health Care Complaints Commission v Philipiah [2013] NSWCA 342 at [42]. The discretion must be exercised on a principled and judicial basis. Costs are compensatory for the successful party in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings: Health Care Complaints Commission v Philipiah [2013] NSWCA 342 at [44].
The general rule is that costs follow the "event" unless justice requires a different approach: Furber v Stacey [2005] NSWCA 242. The question as to who is the successful party "in the event" is not always straight forward. In any particular case there may be a number of events: Galati v Deans (No 3) [2018] NSWSC 1861 at [18]. Ward CJ in Eq went on at [19] to suggest a "helpful approach" to identifying the "event":
As I have noted in other cases, a helpful approach to that question is that which was suggested by the English Court of Appeal in Roache v News Group Newspapers Ltd [1998] E.M.L.R. 161 at 168-169. There, the question as to who was to be seen as the successful party "in the event" was posed as being a question as to "who, as a matter of substance and reality, has won? Has the plaintiff won anything of value which he could not have won without fighting the action through to a finish? Has the defendant substantially denied the plaintiff the prize which the plaintiff fought the action to win?"
While the event may extend to any disputed question of fact or law, the generally accepted approach is that the event is the event of the claim. The claim in this case is two complaints: that Mr Morsingh is guilty of unsatisfactory professional conduct and that he is guilty of professional misconduct. Generally, a successful party should be awarded the whole costs of the proceedings, including the costs relating to issues on which it has failed: Windsurfing International Inc v Petit (1987) AIPC 90-441 at 37,861-37,862.
However, where a successful party has failed on issues of substance, especially where those issues have taken a substantial proportion of the hearing time, the Tribunal may depart from the general rule: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [31] - [36].
In Lucire v Health Care Complaints Commission (No 2) [2011] NSWCA 182 at [49] - [50] Basten JA identified two factors, relevant in this case, which militate against the successful party (assuming that is the Commission) recovering all its costs. The first factor is where the Commission is successful in obtaining findings of unsatisfactory professional conduct, but not professional misconduct. In that case, Basten JA held at [49] that, in the circumstances of that case:
It is not correct to apportion costs equally between the dismissal of the complaint with respect to professional misconduct and the upholding of the other complaint. The factual basis for each complaint was the same: the proper characterisation of the legal consequences of the findings of fact was a discrete issue, involving a relatively small proportion of the time at the hearing and submissions and on which the Commission was partly successful and partly unsuccessful. Any reduction in costs on account of the part on which it was unsuccessful would be relatively minor.
The second factor is where the Commission fails to establish each of the particulars pleaded. Basten JA held at [50] that, in the circumstances of that case:
This aspect is not to be assessed by a numerical calculation of the number of paragraphs of the particulars which were upheld and the number which were rejected. Nor would failure to establish some particulars necessarily result in any diminution in the costs payable to the Commission. However, where it can be said that discrete elements of the conduct complained of were not established, it may be appropriate to reduce the costs to be recovered by the Commission.
The onus is on the unsuccessful party to satisfy the Tribunal that it should not apply the general rule that costs follow the "event": Waterman v Gerling Australia Insurance Co Pty Ltd (No 2) [2005] NSWSC 1111 at [10].
[3]
Issues
In light of the legal principles, and the facts of this case, the issues are:
1. What is the "event" and who is the successful party?
2. Should the Tribunal apply the general rule that costs follow the "event"? If not, on what basis should the Tribunal depart from the general rule?
[4]
What is the event and who is the successful party?
The event in this case is the "claim" that Mr Morsingh is guilty of unsatisfactory professional conduct and professional misconduct.
The Commission brought proceedings seeking findings that Mr Morsingh had engaged in unsatisfactory professional conduct in respect of six patients. For each patient the allegations were divided into several "particulars". Mr Morsingh has admitted engaging in unsatisfactory professional conduct in relation to Patient A (Complaint 1.4 for the prescribing of oxycodone), Patient C (Complaint 1.9) and Patient F (Complaint 1.13). After the evidence had been presented, the Commission withdrew Complaint 1.1(a) and (b), and Complaint 1.6(a), (b) and (c).
In the stage one proceedings we concluded that Dr Morsingh engaged in unsatisfactory professional conduct in relation to five particulars namely: Complaint 1.4 (prescribing of alprazolam to Patient A without the necessary authority to do so), Complaint 1.8 (inappropriately prescribing testosterone to Patient B), Complaint 1.9 inappropriately prescribing diazepam to Patient C); Complaint 1.12 ( inappropriately prescribing Oxycodone, Diazepam, Oxazepam and Tramadol to Patient E) and Complaint 1.13 (inappropriately prescribing of zolpidem (Stilnox) to Patient F. Three of these particulars were uncontested and the factual basis of Complaint 1.8 was not contested. In relation to Complaint 1.12 the Tribunal found that complaint to have been proven on a different basis to the case advanced by the Mr Morsingh. The Commission failed to establish eighteen other contested particulars.
The Tribunal was not satisfied that the proven conduct, when taken together, amounted to "professional misconduct". That meant that the Tribunal could not suspend or cancel Mr Morsingh's registration if he had been registered: National Law, s 149C. In any case, the Commission did not seek such an order. Initially the Commission sought an order that Mr Morsingh be disqualified for a period of time but withdrew that application shortly before the stage two hearing. Ultimately, the Tribunal ordered that Mr Morsingh complete an educational course on prescribing so called Schedule 8 and Schedule 4D medications before he could be re-registered.
The Commission submits that it was the successful party because it was successful in obtaining findings that Mr Morsingh engaged in unsatisfactory professional conduct. According to the Commission, the fact that it was unsuccessful in obtaining a finding of professional misconduct and establishing all of the pleaded particulars does not mean that it was, on the whole, unsuccessful.
Mr Morsingh takes the opposite view. He submits that the Commission was "largely unsuccessful in achieving what it had sought". Unsatisfactory professional conduct was only found in respect of five particulars and three of those were uncontested. The Commission failed to prove eighteen contested particulars.
The final overall outcome of the proceedings was that the Tribunal found that Mr Morsingh had engaged in unsatisfactory professional conduct in relation to five patients. The Tribunal made a protective order as a result of those findings. Those findings, and the orders, are the final overall outcome of the proceedings. Even though the Commission did not establish professional misconduct and failed to establish the majority of the particulars, as a matter of substance, it has won.
While that conclusion may appear to be at odds with the decision in Chatoor v Health Care Complaints Commission of NSW [2020] NSWCA 111, that case involved an appeal where some of the Tribunal's findings at first instance were set aside. In Chatoor, the Tribunal found at first instance that Dr Chatoor had engaged in unsatisfactory professional conduct in respect of two particulars, Particulars 1A and 2(k). The Tribunal ordered that Dr Chatoor be reprimanded, imposed conditions on his registration and ordered him to pay the Commission's costs. On appeal, the Court of Appeal dismissed the appeal against Particular 2(k) but upheld the appeal in respect of Particular 1A. Despite a finding of unsatisfactory professional conduct in respect of one particular, the Court of Appeal ordered the Commission to pay 75% of Dr Chatoor's costs of the appeal and of the first instance proceedings.
The costs decision in Chatoor on appeal was made on the basis that the Complaint on which Dr Chatoor succeeded (Particular 1A) occupied the greater proportion of the written submissions and hearing time. The Court of Appeal held at [62] that the issues relating to Particulars 1A and 2(k) were "quite discrete" and accordingly awarded Dr Chatoor 75% of his costs of the appeal. The Court then held that:
Prima facie, a similar approach should be taken in relation to the costs at first instance. If it is considered that there are aspects of the proceedings below which would not have been obvious to this Court, either party may challenge an award of costs on this basis by an application made within 14 days of this judgment under r 36.16(3A) of the Uniform Civil Procedure Rules 2005 (NSW) for that order to be reviewed.
As can be seen in this passage, the Court of Appeal made the costs decision at first instance on a 'prima facie' basis following appeal. As a result of the appeal, the Court must have considered Dr Chatoor to be the overall successful party but discounted his costs because of his failure on a discrete issue. We do not consider Mr Morsingh to be the overall successful party for the reasons we have given.
[5]
Should the Tribunal apply the general rule that costs follow the "event"? If not, on what basis should the Tribunal depart from the general rule?
The Commission has not submitted that the general rule that costs follow the event should apply. Rather, the Commission has sought an order for 50% of its costs or an order that each party pay their own costs. That submission appears to be based on the Commission accepting that there should be a discount because of the failure to establish professional misconduct and the failure to prove the majority of particulars relating to unsatisfactory professional conduct.
We agree with the Commission's submission that Mr Morsingh should pay only 50% of its costs. The Commission has failed on an issue of substance, namely whether Mr Morsingh is guilty of professional misconduct. As was the case in Lucire v Health Care Complaints Commission (No 2) [2011] NSWCA 182, the factual basis of the unsatisfactory professional conduct complaint and the professional misconduct complaint was the same. However, unlike the circumstances in Lucire, the issue of professional misconduct was dealt with at a separate hearing. That hearing, which lasted two hours, also dealt with the orders the Tribunal should make. The stage one hearing lasted one day. We estimate the proportion of the written submissions and hearing time dealing with the issue of professional misconduct to be 20%. That is a substantial proportion.
The Commission also failed to prove eighteen contested particulars, which were said to amount to 90% of the contested grounds of complaint. Basten JA held in Lucire v Health Care Complaints Commission (No 2) [2011] NSWCA 182, that if "discrete elements of the conduct complained of were not established, it may be appropriate to reduce the costs to be recovered by the Commission". This is not a case where "discrete elements" of the conduct were not established. Various kinds of unsatisfactory professional conduct were proven in relation to five patients. However, the proportion of proven particulars was very low. In addition, three of these particulars were uncontested and the factual basis of Complaint 1.8 was not contested. A further discount of 60% of the Commission's costs is warranted.
[6]
Orders
1. The Respondent is to pay 20% of the Applicant's costs as agreed or as assessed.
2. The Respondent's application for costs is dismissed.
[7]
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: 14 December 2023